Publisher of leading trade magazines for the Footwear, Leather-goods, Leather & PPE industries

S&V Weekly Newsletter Vol.6 No.26, June 29, 2020

This Newsletter is sponsored by SAFLIA

Please note: Click on any ad to go to the advertiser’s website


Tanners, footwear manufacturers seek suspension of wage increase this year

Durban, KZN, SA – The National Bargaining Council of the Leather Industry of SA (NBC) has confirmed that it has received requests for relief measures from employer organisations in 2 of its 3 sectors.
       It is understood that the Southern African Footwear & Leather Industries Association (SAFLIA), on behalf of footwear manufacturers, and the SA Tanning Employers' Association (SATEO), on behalf of tanners, have requested a suspension of the implementation of wage increases from 1 July 2020.
       In the third sector, general goods and handbags, the Association of SA Manufacturers of Luggage, Handbags & General Goods (ASAM), started the first round of negotiations with unions on Saturday, and will conclude talks today.
       NBC general secretary Gerald Naidoo said the unions would respond to SAFLIA’s request today and SATEO's request tomorrow. The footwear and tanning sectors last year negotiated a multi-year agreement, which included a 7.5% increase this year, but the pandemic has led to a reappraisal by SAFLIA and SATEO.


‘Black Lives Matter’ trademark applications surge after protests

According to Bloomberg, "As demonstrators gathered in cities across America to protest police brutality, some individuals were busy trying to trademark the slogans 'Black Lives Matter' and 'I Can’t Breathe' for use on merchandise, apparel and even wine.



Stock Exchange News Service (SENS)

Pepkor: Accelerated bookbuild offering, trading update

Cape Town, W Cape, SA (June 23, 2020) – Pepkor announced its intention to conduct a non pre-emptive placing of up to 172.5 million ordinary shares in the authorised but unissued share capital of the Company (the "Placement Shares") to certain institutional investors (the "Placement"), which represents up to 4.95% of the Company's existing issued ordinary shares. The Placement Shares will be issued by the Company under and in accordance with its existing general authority to issue shares for cash, granted by shareholders at the annual general meeting of the Company held on 11 March 2020. The Placement is being conducted via an accelerated bookbuild process (the "Bookbuild"), which will be launched immediately following this announcement. Rand Merchant Bank, a division of FirstRand Bank Ltd. and Morgan Stanley & Co. International Plc are acting as joint global coordinators and joint bookrunners of the Placement (the “Bookrunners”).

Update on trading environment: The trading performance reported below comprise like-for-like sales growth for the last four trading weeks of May 2020, following the relaxation of lockdown measures on 1 May 2020, and the first three trading weeks of June 2020, unless otherwise stated.        The sales momentum reported for the three trading weeks in May during Pepkor’s interim results presentation on 27 May 2020 continued into the fourth week and the month of June 2020. The Group’s more defensive market positioning which is aligned to basic consumer needs continues to drive good performance. Satisfactory inventory levels have been achieved as a result of the strong winter trade.
       Strong trading in PEP and Ackermans continued, reporting combined like-for-like sales growth of 40% in May and achieving the highest ever monthly turnovers for both retail brands. Trading momentum continued during the first three weeks of June with like-for-like growth of 21%.
       Sales in PEP Africa, which contribute c.3% to Group revenue, declined by double digits in constant currencies during April, May and June, impacted by a weakness in local economies and currencies due to COVID-19. Lockdowns in the respective countries varied in timing and duration.
       The Speciality business, which focuses on more discretionary adult wear and footwear product categories, traded well and achieved like-for-like sales growth of 28% in May and 21% in June.        The consumer electronics and appliances division (Incredible Connection and Hi-Fi Corporation) in the JD Group performed extremely well since re-opening with like-for-like sales growth of 39% in May despite the fact that only a Ltd. product range could be sold. Trading momentum continued into June with like-for-like growth of 58%. The furniture division was unable to trade during May but achieved like-for-like growth of 26% since re-opening in June. Trading in The Building Company has been negative due to the fact that building contractors and the construction industry only re-opened on the first of June. Since the re-opening of the industry, trading has shown a positive trajectory with June showing a cumulative negative growth of only 1%.
       The FLASH business continued to trade during lockdown and reported 28% growth in virtual turnover for the quarter to date. Capfin continued to curtail the granting of credit and the size of the book reduced to R2 billion. Since the commencement of the lockdown period, focus has been mainly on collection of the book which has exceeded expectations thus far.

Update on liquidity and cash flow: Liquidity has improved compared to pre-COVID-19 levels due to the positive trading performance and credit book collections. This enabled the Group to early settle its R521 million bridge term loan facility.
       The credit curtailment and consequent reduction in sizes of the credit books supported cash flow since the start of April 2020. Collections to date have been better than expected although the impact of COVID-19 on future collections remains uncertain.
       Constructive discussions are continuing to waive and amend debt covenants going forward. The Group continues to assess opportunities to reduce costs, conserve cash, access liquidity and improve flexibility in its capital structure during these unprecedented circumstances.

Outlook: The Group continues to assess its portfolio strategy with preference to businesses that provide the best returns. Despite the current positive trading levels the full extent of the impact of COVID-19 on the South African economy and consumer remains to be seen. Pepkor continues to implement measures to protect the Group and improve flexibility in its capital structure during these unprecedented circumstances.
       Pepkor is confident that its defensive discount and value positioning will support market share gains in the current and medium term environment as the market consolidates and consumers focus on basic and affordable products.
       The Group continues to make a positive difference in the lives of our customers and the communities in which we operate by providing convenient access to everyday products and services at affordable prices.


AVI: Trading statement and update

Johannesburg, Gauteng, SA (June 25, 2020) - The second semester’s performance was materially impacted by the COVID-19 pandemic. Significant time and resources were invested to achieve compliance with regulations with particular emphasis on ensuring our employees were safe at work. Despite significant logistical challenges AVI’s essential businesses were able to sustain production and supply our retail partners throughout the period.
       Entyce and Snackworks benefited from increased demand for many products due to increased consumption during the COVID-19 lockdown period. This was however ameliorated in Entyce with the loss of revenue in the Ciro Beverage Solutions business where many core customers were unable to trade during the lockdown. Manufacturing disruption was not significant and the improved volumes helped to absorb the additional direct costs incurred in responding to the COVID-19 pandemic.
       I&J’s production was disrupted by the relatively earlier build-up of COVID-19 infections in the Western Cape. Full compliance with COVID-19 isolation and quarantine protocols reduced the number of employees available to work, resulting in reduced processing capacity and a concomitant reduction in fishing activity during the fourth quarter. The loss of production impacted cost recoveries in both the fishing fleet and land based factories. In addition, congestion at the Cape Town port has delayed export shipments, impacting margin recognition in the quarter. The Danger Point Abalone farm was impacted by poor export demand due to COVID-19 lock-downs in key markets, compounded by Ltd. airfreight availability due to flight restrictions.
       The footwear and apparel businesses were heavily impacted by the COVID-19 lock-downs, with retail stores closed during the level 5 lockdown from 27 March to 30 April 2020 before re-opening on a phased basis during May. Trading post re-opening has been subdued due to poor shopper footfall at many shopping malls.
       The personal care business was restricted to about 50% of normal revenue during the level 5 lockdown. Demand in certain core categories has been poor following the lifting of sales restrictions.
       At a Group level the diversified portfolio partially cushioned the myriad impacts of COVID-19. Entyce and Snackworks performed well enough to absorb the direct additional costs related to the COVID-19 pandemic and offset much of the lost contribution from the fashion businesses. I&J’s COVID-19 impacted fourth quarter will result in a lower second half profit than last year, and full year operating profit is expected to be between 5% and 10% lower than last year.
       Group cash flow from operations remained healthy and debt levels at year- end are expected to be lower than last year, as are finance charges.

Capital gains: Attributable earnings for the year will include the capital gain after tax of R373.3 million arising from the disposal by I&J of its interest in a joint venture with Simplot Australia (Pty) Ltd. in November 2019, as reported in the interim results.

Consolidated headline and attributable earnings: The weighted average number of shares in issue during the year is expected to be 0.3% higher than last year due to the issue of new shares in terms of the Group’s various share incentive schemes.
       We hereby advise shareholders, in accordance with Section 3.4 (b) of the Listings Requirements of the JSE Ltd., that:
- Consolidated headline earnings per share for the year ending 30 June 2020 are expected to decrease by between 7% and 12% over the prior year, translating into a decrease from last year’s 516.6 cents to a range of between 455 and 481 cents per share; and
- Consolidated earnings per share for the year ending 30 June 2020, including capital gains and losses, are expected to increase by between 16% and 21% over the prior year, translating into an increase from last year’s 488.7 cents to a range of between 567 and 591 cents per share.
       It is expected that AVI will release its full results for the year ending 30 June 2020 on or about 7 September 2020.



Mr Price: Final results March 2020

Durban, KZN, SA (June 25, 2020) -Revenue for the year went up 2.1% to R23.0 billion (2019: R22.6 billion) whilst profit from operating activities remained stable at R4 billion (2019: R4 billion). Profit attributable to shareholders decreased to R2.7 billion (2019: R3 billion). In addition, headline earnings per share from continuing operations decreased by 11% to 1 049.9 cents per share (2019: 1 179.4 cents per share).

Dividend: No final dividend has been declared in order to preserve cash considering the uncertainty and future potential disruption, resulting in a decrease in annual dividends of 57.7%. The group experienced a decline in cash reserves of R2 billion during the 5-week lockdown period. However, a strong, cash-based performance since then has ensured that the current financial position remains sound, with cash resources and a debt-free balance sheet available to support current business operations and future uncertainty.

COVID-19: The current and forecast spread of the virus in South Africa remains a concern given its impact on society due to loss of life and the devastating financial impact on businesses and citizens. It is not possible at this stage to quantify the economic impact on the group, but on-going operational disruptions and future uncertainty remain significant challenges. The group anticipates an extremely constrained consumer environment. As a result, R300 million in budgeted expense reduction has been identified as part of group wide austerity activities and cash preservation initiatives have been undertaken, including a 23% reduction in budgeted capex for FY2021. No final dividend has been declared in order to preserve cash considering the uncertainty and future potential disruption, resulting in a decrease in annual dividends of 57.7%. The group experienced a decline in cash reserves of R2 billion during the 5-week lockdown period. However, a strong, cash-based performance since then has ensured that the current financial position remains sound, with cash resources and a debt-free balance sheet available to support current business operations and future uncertainty.

Opportunities: Amid all the uncertainty, the group is fully focused on efficiency, effectiveness, innovation and growth. The way in which the balance sheet has historically been managed has put the group in this unique position. Plans are well advanced in identifying organic growth opportunities, which may be augmented by acquisitions. On 20 May 2020 the group announced on SENS its intent to affect a capital raise of up to 10% of the company's ordinary issued shares, at an appropriate point in time and as market conditions permit. The board and management are of the view that anticipated market conditions will allow strong companies to capitalise on growth opportunities whilst maintaining financial edibility. The group needs to be well positioned to respond with speed and agility to opportunities that may arise and seeks shareholders' support in its growth ambitions.


No-one's immune: Nike's fourth quarter income statement review shows huge drop

Beaverton, Ore., U.S. (June 25, 2020) - Nike, Inc. on Friday reported financial results for its fiscal 2020 fourth quarter and full year ended May 31, 2020. Below is an extract:

Revenues for NIKE, Inc. decreased 38 percent to $6.3 billion, down 36 percent on a currency- neutral basis, primarily due to owned and partner physical store closures across North America, EMEA and APL A due to COVID-19, partially offset by growth in Greater China.

Gross margin decreased 820 basis points to 37.3 percent as higher full-price average selling prices, despite increased wholesale discounts, were more than offset by higher product costs including factory cancellation charges, increased inventory obsolescence reserves and the adverse rate impact of supply chain fixed costs on lower wholesale shipments primarily due to COVID-19.

Selling and administrative expense decreased 6 percent to $3.2 billion, which included an incremental $178 million increase in bad debt expense. Demand creation expense was $823 million, down 19 percent to prior year as retail and brand marketing spend was shifted as sporting events were canceled or delayed due to COVID-19. Operating overhead expense decreased 1 percent to $2.4 billion driven primarily by lower total wages and travel and related expenses, partially offset by higher bad debt expense.

The effective tax rate was 1.7 percent, compared to 20.4 percent for the same period last year. This is primarily due to the mix of earnings taxed in the U.S. and favorability attributable to items such as the use of foreign tax credits.

Net loss was $790 million and diluted net loss per share was $0.51 driven by lower revenue and gross margin as a result of the COVID-19 impact on operations, partially offset by lower selling and administrative expenses.

       For the full report, go to:




Cape Town, W Cape, SA - Former Adidas (SA) sales director Darren Cooke has been transferred to Egypt as GM of the company's Levant and North Africa (LENA) region.
       Kevin Jooste has taken up his former position.


They Said It

"I've been so busy I forgot to pick up my daughter from school. She demanded a bribe of KFC not to tell her father." - Nerisha Jairaj, executive director of SAFLEC, on why I couldn't get hold of her. She may have to buy lots more KFC now.


Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the lockdown that you'd like to share with the industry? We will publish the throughout the lockdown, so please let us know. -


2020 Trade Fairs Another essential service from S&V

Please note that we have updated most 2020 trade fairs and conferences on our website, linked to their websites:


Exchange rates

1. SA Rand (ZAR)


  Euro € GBP £ US $ Yuan Renminbi ¥
2020/01/04 R15.97 R18.71 R14.31 R2.05
2020/01/11 R15.97 R18.76 R14.36 R2.07
2020/01/18 R16.04 R14.47 R14.47 R2.10
2020/01/25 R15.87 R18.82 R14.39 R2.07
2020/02/01 R16.54 R19.81 R15.00 R2.16
2020/02/08 R16.48 R19.41 R15.06 R2.15
2020/02/17 R16.16 R19.44 R14.90 R2.13
2020/02/22 R16.27 R19.43 R15.00 R2.13
2020/02/29 R17.27 R20.08 R15.66 R2.24
2020/03/07 R17.69 R20.44 R15.67 R2.26
2020/03/14 R18.04 R19.94 R16.25 R2.32
2020/03/21 R18.92 R20.50 R17.60 R2.48
2020/03/28 R19.63 R21.93 R17.61 R2.48
2020/04/04 R20.58 R23.37 R19.03 R2.68
2020/04/11 R19.70 R22.43 R18.01 R2.56
2020/04/18 R20.43 R23.49 R18.79 R2.65
2020/04/25 R20.59 R23.53 R19.02 R2.68
2020/04/30 R20.24 R23.27 R18.51 R2.62
2020/05/09 R19.89 R22.69 R18.29 R2.58
2020/05/16 R20.11 R22.49 R18.58 R2.61
2020/05/23 R19.24 R21.47 R17.64 R2.47
2020/05/30 R19.48 R21.67 R17.54 R2.45
2020/06/06 R18.93 R21.28 R16.77 R2.37
2020/06/13 R19.19 R21.39 R17.06 R2.40
2020/06/20 R19.37 R21.28 R17.25 R2.43
2020/06/27 R19.35 R21.28 R17.25 R2.43
Note: For previous rates, see HERE

2. Zambian Kwacha (ZK)


  Euro € GBP £ US $ Yuan Renminbi ¥
2020/06/20 ZK20.39 ZK22.53 ZK18.24 ZK2.58
2020/06/27 ZK20.48 ZK22.52 ZK18.25 ZK2.57

3. Zimbabwean Dollar (Z$)


  Euro € GBP £ US $ Yuan Renminbi ¥
2020/06/20 Z$405.54 Z$446.91 Z$361.90 Z$51.17
2020/06/27 Z$405.98 Z$446.46 Z$361.90 Z$51.13




ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (June 23, 2020) - The current average hide price increased by 2.1% to R0.72/kg from R0.710kg green a week ago. The current price, however, is 9.5% higher than the average price a month ago and is 57.3% lower than the average price a year ago. Prices remain low, with no expectations of a bounce back in the short term. Hide prices; for now; are holding at almost zero; with the aim solely to recover the costs incurred in salting and transporting material. The local hide industry is expected to remain under pressure for the next few months. . NB* Hide prices are determined as the average of the RMAA (Red Meat Abattoir Association) prices and prices of independent companies. - Conce Moraba, agricultural economist, Absa group.

Hide & skin price progression
Date Hides/Kg Dorper/Skin Merino Skin
2020/01/03 1.38 35.00 46.67
2020/01/10 1.42 28.69 45.71
2020/01/17 1.35 30.74 45.71
2020/01/24 1.39 33.75 48.14
2020/02/07 1.36 33.47 47.50
2020/02/14 1.36 33.75 47.50
2020/02/21 1.32 33.75 47.50
2020/02/28 1.29 37.22 43.89
2020/03/06 1.29 36.50 43.50
2020/03/13 1.31 36.00 43.50
2020/03/27 0.93 37.22 48.33
2020/04/03 0.92 37.78 47.36
2020/04/10 0.89 35.63 42.22
2020/04/17 0.88 39.38 41.25
2020/04/24 0.89 33.82 43.33
2020/05/01 0.82 34.55 46.88
2020/05/08 0.82 32.10 43.33
2020/05/18 0.77 32.10 43.33
Note: For previous prices, see HERE


29/06/1947: Saeed Bux, Elahi Footwear, Durban.
30/06/1948: John Ashworth, Little Slipper, Port Elizabeth.
01/07/1953: Bobby Janky, retired, formerly Michelle Footwear, Durban.
01/07/1963: Tommy Sharma, Bata SA, Pinetown.
02/07/1949: Maria Augusta Craveiro, Goosie’s, Ladybrand.
02/07/1959: Leo Greef, formerly Southern Hemisphere Trading Trust, Uitenhage.
02/07/1971: Rajeev Matai, Mantella Q Leather, Pinetown.
02/07/1971: Suritha Naicker, Ethekwini Leather, Durban.
03/07/1971: Steven Coetser, Safety Smart, Pinetown.
03/07/1949: Pieter Coetzee, Assegaay Bosch Ranch, Van Wyksdorp.
04/07/1952: Eddie Lahee, formerly Shoeperama (in liquidation), Durban.
04/07/1956: Warren Wareing, Island Style, Durban.
04/07/1967: Martin MacGregor, Bay Solutions, Port Elizabeth.
05/07/1941: Judy Powell, retired, formerly Footwork, Trafalgar.


In Memoriam this week

29/06/2014: Joe Vivian (b. 02/11/1928), agent, Cape Town.
01/07/2016: Matthew Barnard (b. 07/05/1936), Stanhope Boot & Shoe, Pinetown.
02/07/1997: Clemente Villani, Villani Shoes, Johannesburg.
02/07/2010: Justin McCarthy (b. 29/01/1958), Groundcover, Curry’s Post.
02/07/2019: Cecil Hansen (b. 08/01/1936), C.L. Hansen Agencies, Durban.
04/07/2010: Kasieprasad Pattundeen (b. 29/12/1924), Palm Footwear, Durban.
05/07/1999: Norman Berrill, freelance designer, Durban.

Have you let us know about your birthday, or the birthdays of your colleagues? Our readers love this section, so please become part of it. This also applies to the In Memoriam section. Help us remember former colleagues.


Have a look at these links

We invite businesses to send us links to websites, Facebook pages and the like which they feel would be of interest to others. The links below are from our database:
Chesler's Shoes, Boksburg, Gauteng, SA. Family footwear.
Chess International, East London, E Cape, SA. Men's outfitter.


Classified Adverts


Ramjee's Shoe Store, an up-market, reputable and well-established Footwear and Men's Clothing outlet in an incredible location (between 2 Taxi ranks). Well stocked and with a fully trained team. Serves a host of discerning clients, locally and regionally.

Full turnover and inventory figures will be provided on request.

Owner retiring after 40 years of highly profitable trade.

Enquiries: Email or call Bharat 018 462 8211.


This business was established in 2007 and is an operational going concern. The Business has a loyal and large customer base in the WC and other provinces and offer excellent and affordable Hunting and Game skins products to the general public and commercial Wholesale/Retail trade.
Currently the only business in the Western Cape that tans hides, both commercial and game, with huge growth potential at competitive pricing.
Excellent earnings potential as business has not reached its full growth potential yet. Growth exists in expanding to larger client bases nationally and exploiting the International/export market.
We have well trained staff with more than 14 years in the industry.  Email me for pictures and more detailed information if you are interested.
Enquires : Call JB SMUTS   0827383083  or   E –Mail


Contact us

News & Classifieds: Tony Dickson, +27 (0)31 209 7505,

Next newsletter: July 6, 2020.

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