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S&V Weekly Newsletter Vol.6 No.36, Sept 7, 2020

This Newsletter is sponsored by SAFLIA

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

 

Edgars deal gets go-ahead

Pretoria, Gauteng, SA – The Competition Tribunal on Friday approved, with employment conditions, Retailability's purchase of Edgars.
       "The Tribunal has approved the transaction on condition that the merger parties shall not retrench any employees on account of the merger for a period of 3 years from the merger implementation date. In addition, the acquiring firm will give preference to any former Edcon employees should vacancies arise within 3 years of the merger implementation date," the judgement read.
       "The Commission, in its assessment, was of the view that the transaction is unlikely to substantially prevent or lessen competition. In addition, it found that the merger will result in 5200 jobs being saved."

 

Retail

Botswana

Sourcing product 'a challenge'

Options. Family outfitter, 18 stores.
Gaborone, Botswana – After 3 lockdowns - the first for over a month, the second for just 3 days, and the third for 2 weeks, "we're in survival mode right now," MD Abdul Kareem Kader said. He said there had been an upsurge in business after the first lockdown, but not after the others, and that overall turnover was around 7% down on pre-lockdown figures.
       He said Options' strategy was to "try to price correctly and bring in the right merchandise". Buying, however, had been affected by Options cancelling orders, which it was now trying to reinstate, and suppliers - importers particularly - having also cancelled.
       He said core product - for Options, jeans and sneakers - was selling best, although canvas had slowed.
       Options will still be opening 2 new stores this year: A store in Kanye at the end of October, and an extension to a Francistown store in mid-November.

 

Lesotho

Internal travel ban hurting sales

Pick 'n Pay Hypermarket. Family outfitter, 3 stores.
Maseru, Lesotho – Lesotho's borders are still closed to people, although goods are allowed through, MD Fazel Sayanvala said. He said his stores, all in Maseru, were down 30-35% in turnover.
       Business had been affected by the loss of jobs, and also because there is still a ban on travelling within the country. He said much of his business came from shoppers coming in from country areas.
       He said it was difficult for him to gauge what was and wasn't selling because he can't get into the country.
       Despite the name, his business in purely an outfitter. "We've been there since 1977," he said. "People there know what we do."

 

 

South Africa

There are always silver linings

By Sanjay Bhagwandas, Ginger Bhagwandas Exclusive. Family outfitter, 4 stores.
Durban, KZN, SA – We've been trading since May, with the 1st week in May being very busy. It's been very erratic since then with a slight improvement into level 2 lockdown. We patiently await for the economy to move to level 1 and for flights to be allowed into the country. Our mall stores have been negatively impacted due to no tourism and the locals scared to come out.
       June and July were more-or-less the same. August has seen an improvement, especially in the malls, with consumers wanting formal wear as they go back to offices and start again with physical meetings and planned weddings which were postponed due to lockdown restrictions. There was no demand for formal wear in the 3 months following lockdown as people were at home.
       Unemployment and its negative impact on trade was a problem pre-Covid and the pandemic has worsened the situation with large scale retrenchments expected from bigger companies. Older folk have also been put on leave and with some employees on short time. But with every cloud there's always a silver lining, so things will get better over time. Faith, patience and perseverance are key.
       Our strategy has been driving online sales as well as promotions.
       Forecasting for the rest of the year is very difficult, but consumers have always come back for basic essentials and we also expect a surge in parents buying more for their kids and less for themselves, leading up to Christmas due to eroded disposable incomes. We also expect a surge in sales of wedding suits as many ceremonies have been postponed.

 

 

Finance

Stock Exchange News Service (SENS)

Truworths: Final results June 2020

Revenue drops 18%, warning of difficult period ahead

Cape Town, W. Cape, SA (September 03, 2020) – Revenue for the year decreased by 18.1% to R18 billion (2019: R19.6 billion), gross profit was 11% lower at R8.3 billion (2019: R9.3 billion) and operating loss was recorded at R110 million (2019: operating profit of R1.6 billion). Loss for the period attributable to equity holders of the company came to R556 million (2019: profit of R619 million). Furthermore, headline earnings per share dropped 28.2% to 410.4 cents per share (2019: 571.7 cents per share).
Final dividend: The directors of the company have resolved to declare a final gross cash dividend from retained earnings in respect of the 52-week period ended 28 June 2020 in the amount of 31 South African cents (2019: 135 South African cents) per ordinary share to shareholders reflected in the company's register on the record date, being Friday, 25 September 2020.
Company outlook:
South Africa: Truworths
Consumer spending is expected to remain under pressure in the medium term owing to the effects of South Africa's prolonged economic downturn, fuelled by the negative impact of the COVID-19 pandemic. The fragile labour market has come under increased pressure as many employers implement workforce reductions or face closure, with rising unemployment a further threat to consumer spending. Electricity load shedding also remains a risk to trading in the months ahead. Lower consumer inflation, low interest rates and government aid packages may, however, provide some relief for struggling households. In the months ahead Truworths will focus on the health of the account portfolio to manage the impact of higher credit losses arising from the economic downturn in the wake of COVID-19. Lower interest rates will result in a reduction in interest earned on the book.
       Truworths' medium-term prospects will be supported by extending its merchandise ranges, its expanding e-commerce offering, the success of the lay-by payment option offered to non-account customers, continued investment for growth, robust cash flows and strong balance sheet.
       Truworths' retail sales for the first nine weeks of the 2021 reporting period decreased 11% compared to the first nine weeks of the prior period.
United Kingdom: Office
Trading conditions and consumer confidence remain under intense pressure and it is expected that the retail sector will remain constrained in the medium term owing to the adverse impact of COVID-19 and the uncertainty caused by the January 2021 Brexit deadline.
       Progress on the turnaround plan implemented by management in 2019 has been hampered by the outbreak of COVID-19 and the trading restrictions imposed on the retail sector during the national lockdown. Following the refinancing of the business, turnaround efforts are being intensified to ensure the long-term viability of the business. These include the restructuring of the business, implementation of a staff redundancy programme, as well as initiatives in relation to trading (buying and planning), cost control, capital expenditure, brands and marketing. The store portfolio remains a key focus point and management continues to engage with landlords on lease negotiations. Loss-making and marginal stores will be closed as leases come to an end. Office's turnaround will be supported by its growing e-commerce business which is well positioned to capitalise on the increasing shift to online shopping that has accelerated as a result of the COVID-19 pandemic. Despite the challenges, Office remains a strong brand and a key strategic partner to the world's leading fashion footwear brands. Office's retail sales for the first nine weeks of the 2021 reporting period decreased 30% in Sterling compared to the first nine weeks of the prior period. During this period Office traded from 115 stores compared to 139 in the prior period.
Capital expenditure of R415 million (Truworths R372 million and Office GBP2 million) has been committed for the 2021 reporting period. Group trading space is expected to be largely unchanged (Truworths unchanged and Office decrease 20%).
Conclusion: Trading conditions in the Group's two main markets in South Africa and the UK will continue to be depressed owing to the impact of COVID-19. The possible imposition of further lockdown restrictions that may result in store closures could have an adverse impact on Group revenue and earnings.

 

Rex Trueform: Trading statement

Earnings slump forecast

Cape Town, W. Cape, SA (September 03, 2020) – Shareholders are accordingly advised that a reasonable degree of certainty exists that:
*Rex Trueform’s earnings per share (“EPS”) will decrease by at least 20%, from earnings of 206.4 cents per share reported by Rex Trueform for the year ended 30 June 2019 to earnings of less than 165.1 cents per share for the year ended 30 June 2020; and
*Rex Trueform’s headline earnings per share (“HEPS”) will decrease by at least 20%, from headline earnings of 73.1 cents per share reported by Rex Trueform for the year ended 30 June 2019 to headline earnings of less than 58.5 cents per share for the year ended 30 June 2020.
       The information on which this trading statement has been based has not been reviewed or reported on by the Group’s auditors.
       The annual financial results for the year ended 30 June 2020 are anticipated to be released on or about 30 September 2020.

 

 

They Said It

"The Durban guys came to Ladysmith to fish." - Agent Ian Gordon on approaches to buy Topside Footwear, which was advertised for sale in this newsletter.

"You're right...I don't know what that means." - Faulks Footwear's AK Vanker when given the size of an ad in pixels. And when it was repeated to him in centimetres, there were a few moments' silence before he said "Okay - about two-and-a-half inches." I guess it was all better in the old days.

 

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. - tony@svmag.co.za

 

 

Exchange rates

1. SA Rand (ZAR)

Source: http://www.x-rates.com/calculator/

 
  Euro € GBP £ US $ CNY ¥
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
2020/07/04 R19.14 R21.24 R17.01 R2.40
2020/07/11 R18.94 R21.16 R16.77 R2.39
2020/07/25 R19.39 R21.36 R16.64 R2.37
2020/08/01 R20.05 R22.28 R17.05 R2.44
2020/08/08 R20.78 R23.02 R17.63 R2.53
2020/08/15 R20.57 R23.73 R17.37 R2.49
2020/08/22 R20.23 R22.45 R17.15 R2.47
2020/08/29 R19.74 R22.14 R16.58 R2.41
2020/09/05 R19.66 R22.06 R16.61 R2.42
Note: For previous rates, see HERE

2. Zambian Kwacha (ZMW)

Source: https://www.xe.com/currencyconverter/

 
  Euro € GBP £ US $ CNY ¥
2020/06/20 20.39 22.53 18.24 2.58
2020/06/27 20.48 22.52 18.25 2.57
2020/07/04 20.24 22.46 17.99 2.54
2020/07/11 20.54 22.94 18.17 2.59
2020/07/25 21.18 23.26 18.17 2.59
2020/08/01 21.55 23.95 18.31 2.66
2020/08/08 24.05 24.05 18.42 2.64
2020/08/15 22.08 24.40 18.64 2.68
2020/08/22 22.48 24.94 19.05 2.75
2020/08/29 23.33 26.16 19.60 2.85
2020/09/05 23.27 26.11 19.66 2.87


3. Zimbabwean Dollar (ZWL$)

Source: https://www.xe.com/currencyconverter/

 
  Euro € GBP £ US $ CNY ¥
2020/06/20 405.54 446.91 361.90 51.17
2020/06/27 405.98 446.46 361.90 51.13
2020/07/04 407.08 451.78 361.90 51.21
2020/07/11 408.89 456.71 361.90 51.70
2020/07/25 421.71 463.13 361.90 51.58
2020/08/01 426.09 473.50 361.90 51.58
2020/08/08 426.53 472.42 361.90 51.93
2020/08/15 428.56 473.55 361.90 52.06
2020/08/22 426.90 473.72 361.90 52.30
2020/08/29 430.86 483.20 361.90 52.71
2020/09/05 428.42 480.70 361.90 52.89

 

 

 

 

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (August 31, 2020) - The current average hide price decreased by 2.2% to R0.57/kg from R0.58/kg green a week ago. The current price is 11.8% higher than the average price a month ago and is 62.7% lower than the average price a year ago. The local and global hide markets remain under significant pressure, with demand at very low levels, resulting in prices reaching almost zero for many players. Industry players are not very optimistic, given expectations that demand will remain low in the coming months. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Abrie Rautenbach, head Absa agribusiness, and Paige Bowen, 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
2020/05/22 0.72 26.54 40.00
2020/05/29 0.72 25.44 40.00
2020/06/05 0.70 23.65 40.00
2020/06/12 0.72 31.14 45.71
2020/06/19 0.69 23.62 43.13
2020/06/26 0.73 28.92 47.14
2020/07/03 0.67 23.58 43.13
2020/07/10 0.68 24.96 43.13
2020/07/17 0.61 28.83 45.00
2020/07/24 0.51 25.63 43.13
Note: For previous prices, see HERE
 

  

07/09/1981: Mohamed A Lalla, Tysons Shoe & Clothing, Vereeniging.
07/09/1972: Karl Flowers, Authenticae, Northampton.
08/09/1954: Denis Tuchten, formerly Shoe Connection, Cape Town.
08/09/1960: Paulo da Silva, emigrated, formerly Bambi Shoes [closed], Durban.
08/09/1970: Kevin Naidu, Shenlea Agencies, Durban.
09/09/1929: Bill Hoffman Erlings, Johannesburg.
09/09/1943: Simon Liu, emigrated, formerly MCA Marketing [out of footwear], Midrand.
09/09/1952: Abisha Tembo, formerly the DTI, now Beier Industries, Pinetown.
09/09/1953: Fernando Santos, Bolton Footwear, Cape Town.
11/09/1938: Roley Rogers, footwear agent, Johannesburg.
12/09/1940: Tony Mason, retired, formerly Resolute Engineering [closed], Cape Town.
12/09/19xx: Silvio Ceriani, BBF Safety Group, Pinetown.
13/09/1958: Mark Gibbings, Apeco, Pinetown.

 

In Memoriam this week

08/09/2017: Roger Benjamin (b. 17/08/1945), agent, Port Elizabeth.
09/09/2000: Erik Peter Rormose (b. 11/03/1934), Bulley’s Tannery/Coja Tannery/Silverton Tannery/KwaNdebele Tanning/Kembe Estates.
09/09/2018: Errol Smith (b. 07/02/1946), ENS Machinery, Pietermaritzburg.
11/09/1998: Harry Chafkin, Chafkin's Shoe Co, Benoni.
11/09/2008: Robbie Chapman (b. 10/08/1957), Canterbury International SA [closed], Cape Town.

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:
Claw Boot, Johannesburg, Gauteng, SA. PPE distributor.
Cleo Boutique, Cape Town, W. Cape, SA. Women's boutique.

 

Contact us

News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za

Next newsletter: September 14, 2020.

SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za

Should you wish to subscribe email tony@svmag.co.za
Our website www.svmag.co.za

 

 

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