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

S&V Weekly Newsletter Vol.6 No.37, Sept 14, 2020

This Newsletter is sponsored by SAFLIA

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

 

Retail

Botswana

Fear, not money, the major problem

Raymond's, men's outfitter, 1 store.
Gaborone – Business had been low since reopening, MD Muneer Khan said, and turnover was "not even close" to last year's figures.
       "People don't have the confidence to come shopping," he said. "I feel it's not so much a question of not having the money to spend, but rather being afraid of catching the virus."
       He said Raymond's was trying to control costs and was advertising specials "without getting much response".
       He said online shopping wasn't significant in Botswana because connectivity was low, and people also needed bank cards to be able to shop.
       "When people do come in, they're not trying to buy down, but they do want to get the most they can for their money."

 

Eswatini

Customers 'expect deep price cuts'

Westecs, family outfitter, 1 store
Manzini – Business was very quiet, director Abu Syed Ansar Maksud said.
       Westecs was buying cheaper merchandise, and "watching what we spend".
       "We've been marking down, and some of the customers expect half price sales - sometimes we have to mark a product up a bit before we cut it by 50%, so that we can make some profit!"

 

Namibia

'We should recover quite quickly'

Universal Footwear & Clothing Brands, agent.
Windhoek – Business was "a bit of a mixed bag", commission agent Anton Sprake said. "Retailers who are driving their businesses are getting the benefits, and are doing an amazing job, but those who are a bit lackadaisical are falling behind and battling to pay, and there have been some casualties."
       He said low interest rates and the ongoing ban on travel in some areas - people in Windhoek have not been able to leave the area for a month, and the ban was on Friday extended for another 5 days, until the end of this week - had probably helped retailers.
       "People haven't been able to travel, or to do much eating out, so I think they've been shopping," he said.
       He said tourism appeared to be poised for growth. "Apparently because of its very small population in a huge territory, Namibia is apparently one of the most searched countries on travel sites. Also, Air Ethiopia has just resumed its flights here, and Lufthansa is about to resume its flights.
       "So, it's a mixed bag, but I think the country should recover quite quickly."

 

 

South Africa

'It's getting better each month'

Leather Zulu, bespoke leather goods manufacturer, repairer and retailer, 1 store.
Johannesburg, Gauteng, SA – Business was "not quite back to where it was before the lockdown, but getting better every month", director Thembi Mazibuko-Kahimbaara said.
       She said 2 strategies had helped Leather Zulu pick up business.
       The first has been to promote itself as a repairer of leather and designer handbags, "which has been getting a lot of traction - people have to be careful with money, so they're repairing rather than buying".
       The other has been to promote online business, which has taken several forms: Selling new items online, having repair items received and returned by courier, and making online appointments for people to visit, "so that when they do come, it's only them and us", she said. Leather Zulu's products are mostly made-to-order.

 

Triple M in business rescue

Cape Town, W. Cape, SA – Triple M Footwear (Pty) Ltd, which has 24 stores and a wholesale division, and which trades as Shoerama, Nextstep and Shoeline, went into business rescue on September 2, according to a letter to creditors sent by Herman Bester of Tygerberg Trustees. The first zoom meeting of affected parties will be held tomorrow (September 15) at 12.

 

Zimbabwe

'We're going down the same road for the second time'

Shoe Biz, family footwear, 1 store.
Bulawayo – "To put it mildly, the situation here has been pretty grim for a long time," proprietor Omar Hassim said. "Even before Covid, the economy had been declining. Covid just made it worse."
       With the majority of people unemployed, disposable income was very limited, he said.
       The Zimbabwe dollar declined precipitously against the US dollar, and although the US dollar has been reintroduced as the accepted currency of business, almost everyone - including the civil service, by far the biggest employer - is paid in Zimbabwe dollars.
       The lack of foreign currency prevented manufacturers from importing components, leading to many suppliers and most big manufacturers closing or scaling back, leaving small, owner-run businesses as the major source of goods.
       "We haven't been able to import much because of the currency situation," he said. "We've also shut 2 of our 3 stores."
       He said the recently introduced forex auction system had "stabilised the situation to some degree".
       "We're going down the same road for the second time," he said. "We keep going because it's human nature to survive."

 

 

The 'masterplan' for SA's CTFL sector

Official DTIC release

Localisation plan in the clothing, textile, footwear and leather industry set to accelerate

From Sidwell Medupe, departmental spokesperson, DTIC
Pretoria, Gauteng – Stakeholders across the value-chain in the Clothing, Textile, Footwear and Leather (CTFL) industry have committed to working closely with each other over the coming weeks and months to identify and execute on opportunities to deepen localisation and bolster production in the sector.
       This was a key outcome of a meeting of the Executive Oversight Committee (EOC) managing the implementation of the masterplan for the sector, which was held on Wednesday, 9 September 2020.
       The virtual meeting, chaired and hosted by the Minister of Trade, Industry, and Competition, Minister Ebrahim Patel and attended by other EOC members, including the CEOs of major apparel and textile retailers, manufacturers and organised labour, sought to discuss plans to accelerate bringing back more local apparel and textile production to South Africa.
       Retail CEOs present included the CEO of The Foschini Group and Chair of the National Clothing Retail Federation, Anthony Thunström, CEO of Woolworths South Africa, Zyda Ryland, CEO of Pepkor, Leon Lourens, CEO of Mr Price, Mark Blair and the CEO of Truworths, Michael Mark. Representatives from Pick ‘n Pay Clothing were also present along with major manufacturers.
       The general-secretary of SACTWU, André Kriel, and the general-secretary of NULAW, Ashley Benjamin, represented workers in the sector.
       Minister Patel was accompanied by a government delegation including Deputy Ministers, Nomalungela Gina and Fikile Majola, the SARS Commissioner, Edward Kieswetter, and ITAC Chief Commissioner, Meluleki Nzimande. The CEO of Proudly South Africa, Eustace Mashimbye, was also in attendance.
       The CTFL sector has been negatively impacted by the effects of the Covid-19 pandemic and the associated lockdown. Sales in the first half of the year fell 20% adjusted for inflation versus the equivalent period last year, while production volumes declined by 30%.

       Despite this, stakeholders expressed optimism for the remainder of the year, as they accelerate work to increase the levels of local made clothing sold in South African retail stores.
       The R-CTFL masterplan, which was signed by stakeholders in November last year, provides a blueprint for investment and job creation through localisation in the industry. The plan includes a bold commitment to increase the proportion of locally produced fashion sold in retail stores from 44% currently to 65% by 2030. The commitment is expected to increase employment in the sector by another 120 000 jobs across the value chain.
       Stakeholders reported on activity since the signing of the masterplan, and discussed the immediate steps that can be taken to increase the pace with which the industry achieves its localisation goals.
       “The Covid-19 pandemic has made the argument for localisation even more urgent and important. The key issue for our economy now is the return of domestic demand. We need to stimulate the economy via deeper localisation efforts”, said Minister Patel.
       “We are now at the stage where we absolutely have to focus for both the good of our industry but also for the South African economy and our future”, Anthony Thunström CEO of The Foschini Group (TFG) and Chair of the NCRF.

Note: There will be another meeting with the minister in about 6 weeks.

 

Industry response

Some hopeful of things to come

John Comley, CEO of Celrose Clothing and its footwear manufacturing subsidiary, Eddels, said the masterplan had been set back by the lockdown, but that looking ahead, he expected it to generate better results for his businesses within 18 months.
       "This financial year has been very tough," he said, "but I can definitely see more interest from the retailers. We have to remember that they have also had a difficult year, and that ultimately we have to have consumers who are in the position to buy.
       "We hear very conflicting reports about what really is happening out there, but I know that the chains have lost a lot."
       He said the plan needed a "proper manufacturing policy", which would have to include a financial policy. "How do you finance a footwear factory when the banking system is really averse to manufacturing generally at the moment?"

Caprini Footwear MD Sanjay Pattundeen said he was getting good enquiries and good orders, "but I can't say whether it's because of the masterplan or not - I think it's probably a combination of factors, including, for example, the logistical problems of getting footwear from China at the moment".
       However, he said there had been "a very positive response" from retail at the first masterplan meeting, which he hoped would translate into more business in future.

In response to whether there had been a noticeable increase in interest by the chains in his footwear, Dick Whittington Footwear MD Arveen Boodhoo wrote: "Sort of. We have not been a major chain store player in the past during which time we focussed on our own brands. We have really only begun courting chain store business early this year. Although the numbers received thus far are relatively small, we are thankful for small mercies and we see it is a positive start.
       "In fairness to the chain signatories, they too have challenges in that they must adapt their businesses to fluid trading conditions and consumer demand which will have a knock-on effect on manufacturers.
       "That said, the pandemic has put paid to some of the milestones in the masterplan and in my humble opinion will need some remedial action.
         "Does the government tender business also need some attention?  Indeed. As you have reported over the years, volumes have declined substantially, yet the number of state employees has remained static in some departments and grown in others (600 000 pairs in 2012 down to 150 000 in 2020). We forecast a further decline over the next 2 years as budgets get reprioritised towards more critical needs. Government must address this through its Industrial Policy Action Plan or it risks losing further manufacturing capabilities for specialised technical products."

Willowton Footwear member MA Mahomed said he didn't supply chains, and therefore hadn't yet seen any benefit.
       "It's all so new," he said. "I suppose they'll iron out the kinks over time, but it's a start.
       "Where we should benefit down the line is that component suppliers should be stronger and therefore that they should be able to carry more and more varied stocks of materials."
       Willowton suppliers independent retailers and hawkers, and he has only partially reopened. "Covid has caused so much trouble."

 

And one who thinks nothing has changed

Mohamed Vanker, proprietor of Tego Footwear, said the plan had so far achieved almost nothing. In a hard-hitting email to FLIC, SAFLIA and S&V, he wrote:
       "Over a year has passed and I don’t see any movement in our industry. I manufacture men’s footwear and I don’t see the chains being part and parcel of this plan.
       "When I do my store visits (only in the men’s section), I find the following:
       Woolworth - zero men’s closed footwear, only beach thongs made locally.
       Truworths - the same in men’s...only sandals and thongs made locally,
       Markhams - only thongs and one closed shoe made locally.
       "I see some movement in ladies' footwear towards local.
       "What would also help would be if chains visited manufacturers to see what they can produce. Most of them don’t know the potential of the manufacturers.
       "The biggest stumbling block in our industry is that our supply chain is slowing vanishing (only 5 raw materials suppliers), and unit manufacturers are far behind in what’s happening in the market.
       "Illegal imports and fakes are sold in broad daylight and nothing is done to these ruthless foreigners who are damaging our market and affecting the retail sales of chains and other local retailers.
       "I doubt any of them pay any taxes. SARS turns a blind eye to these culprits.
       "You guys at corporate level don’t see the damage caused to the industry. Please take a walk down town and you will see for yourself what damage is done by these guys. If you scared to do that, go on Facebook market page - they sell all the fakes online Also. when SARS do a raid once a year, they only take the goods displayed. They don’t lock them up, and all the stock is kept in dodgy warehouses. The next day they are back selling the fakes. There's now way on earth that we can compete with these illegal imports."

 

 

Stock Exchange News Service (SENS)

AVI: Final results June 2020

Footwear profits plunge

Johannesburg, Gauteng, SA (September 7) – Revenue for the year went up 0.4% to R13.210 billion (2019: R13.151 billion) whilst operating profit before capital items was 7.5% lower at R2.3 billion (2019: R2.5 billion). Profit attributable to owners increased by 21.4% to R1.9 billion (2019: R1.6 billion). Furthermore, headline earnings per share decreased by 8.9% to 470.8 cents per share (2019: 516.6 cents per share). However, in its segmental review, its footwear divisions saw major drops:

  2020 Revenue (Rm) 2019 Revenue (Rm) % Change 2020 Profit 2019 Profit % Change
Spitz (including Gant) 1287,8 1523,8 (15,5) 234,2 358,1 (34,6)
Green Cross 187,2 295 (36,5) (32,0) (29,6) (8,1)

Snackworks was the biggest and by far the most profitable division.

 

They Said It

"I am now based and living in the UK in a small town called Harpenden (just north of London), since mid-January. Of course, we got our timing to start a new life here pretty wrong! The job market here is terrible and it's been impossible to find a decent job." - Former Vandan owner Alex Largatzis. More on him in the next issue.

 

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 $ 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
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
2020/09/12 R19.83 R21.42 R16.74 R2.45
Note: For previous rates, see HERE

2. Zambian Kwacha (ZK)

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

 
  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
2020/07/04 ZK20.24 ZK22.46 ZK17.99 ZK2.54
2020/07/11 ZK20.54 ZK22.94 ZK18.17 ZK2.59
2020/07/25 ZK21.18 ZK23.26 ZK18.17 ZK2.59
2020/08/01 ZK21.55 ZK23.95 ZK18.31 ZK2.66
2020/08/08 ZK24.05 ZK24.05 ZK18.42 ZK2.64
2020/08/15 ZK22.08 ZK24.40 ZK18.64 ZK2.68
2020/08/22 ZK22.48 ZK24.94 ZK19.05 ZK2.75
2020/08/29 ZK23.33 ZK26.16 ZK19.60 ZK2.85
2020/09/05 ZK23.27 ZK26.11 ZK19.66 ZK2.87
2020/09/12 ZK23.66 ZK25.56 ZK19.97 ZK2.92


3. Zimbabwean Dollar (Z$)

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

 
  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
2020/07/04 Z$407.08 Z$451.78 Z$361.90 Z$51.21
2020/07/11 Z$408.89 Z$456.71 Z$361.90 Z$51.70
2020/07/25 Z$421.71 Z$463.13 Z$361.90 Z$51.58
2020/08/01 Z$426.09 Z$473.50 Z$361.90 Z$51.58
2020/08/08 Z$426.53 Z$472.42 Z$361.90 Z$51.93
2020/08/15 Z$428.56 Z$473.55 Z$361.90 Z$52.06
2020/08/22 Z$426.90 Z$473.72 Z$361.90 Z$52.30
2020/08/29 Z$430.86 Z$483.20 Z$361.90 Z$52.71
2020/09/05 Z$428.42 Z$480.70 Z$361.90 Z$52.89
2020/09/12 Z$428.70 Z$463.13 Z$361.90 Z$52.95

 

 

 

 

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (September 07, 2020) - The current average hide price increased by 4.0% to R0.59/kg from R0.57/kg green a week ago. The current price is 3.1% higher than the average price a month ago and is 61.0% 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
 

  

14/09/1941: Rob Jordan, retired, formerly Jordan Shoes, Cape Town.
14/09/1943: B Oerder, Bolt Leather, Bedfordview.
14/09/1955: Rafiq Hajat, Footwear Centre, Malawi.
14/09/1968: Nasser Narot, Shoe Preme, Durban.
14/09/1983: Ridhwana Shaik, Save Our Soles Manufacturing, Lenasia.
16/09/1965: Roy Feigenbaum, Superior Leather, Bramley.
17/09/1944: Avril Goldstein, Daisy Roots, Balfour Park.
19/09/1976: Harunur Rashid Rubel, Splendour Investments Ltd, Manzini, Swaziland.
19/09/1976: Shahid Koor, Urban Mania, Cape Town.
20/09/1947: Patrick ‘Chicken’ Price, agent, Durban.

 

In Memoriam this week

15/09/1995: Andy Bax, NPI, Durban.
15/09/2013: Bruce Mallett (b.27/06/1952), Simply Shoes, Johannesburg.
15/09/2014: Fred Eboru (b. 01/10/1947), Fred Footwear, Port Elizabeth.
15/09/2016: Franco Polia (b. 01/01/1937), designer, Durban.
18/09/1992: Wally Barkus, agent, Durban.
18/09/2012: Jimmy Andresen (b. 02/06/1947), agent, Johannesburg.
18/09/2000: Marthinus Philipus ‘MP’ Theunissen (b. 09/06/1919), Chemical Specialities/Clariant, Durban.
20/09/1998: PW (Pat) Singh, Palm Footwear, 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:
Clothes Line, Durban, KZN, SA. Mini-chain, men's and women's clothing and accessories.
Clothing Junction, Durban, KZN, SA. Chain, women's clothing and accessories.

 

Contact us

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

Next newsletter: September 21, 2020.

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

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