S&V Weekly Newsletter Vol.6 No.43, Oct 26, 2020

This Newsletter is sponsored by SAFLIA

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

Busby hopes to come out of business rescue today

Johannesburg, Gauteng, SA – Retailer and wholesaler The New House of Busby, which went into voluntary business rescue on July 30, expects to hear later today whether it will be able to come out of business rescue, CEO Bernard Mostert confirmed on Friday. More details in S&V Footwear & Leather Goods later this week.

Retail

Botswana

Lockdown continues to hurt trading

Stephan Ncube, agent, Jumbo Footwear.
Gaborone – The lockdown continues to affect retail, and the state of emergency has been extended to March next year.
      Only the supermarkets are reasonably busy. For everyone else, it's a struggle because consumers are reluctant to come into town. The long queues to get into stores mean they have to plan beforehand which stores they'll visit.
      I estimate retailers are doing about 60% of the turnover they were doing last year, some less. Some of the chains are closing branches. I also notice a lack of new merchandise - retailers seem to be running down old stock.

Lesotho

Government doesn't have money to buy

Eunice Sebatane, director, Eunique Enterprises (Pty) Ltd, work wear and safety footwear distributor.
Maseru – It’s a fact we are struggling to make ends meet at present as a result of the COVID-19 impact on our weak economy.
      However, we are currently exploiting the lucrative advantages resulting from this Pandemic. We are looking for suppliers of sanitizers as well as ANTI-BAC Spraying Machines (Hot & Cold) for use in offices, hospitals, household, etc.

Malawi

Grateful for small mercies

Rafiq Hajat, chairman, Footwear Centre, family footwear retailer.
Blantyre – The wave of optimism after the new government came in has had the effect of increasing sales, but not to the level we hoped for. However, we are grateful for small mercies.
      A worry is that the Malawian Kwacha is depreciating against the Rand and major currencies - 10% over the last 2 months - and that shows no sign of abating. I think the root cause is that our biggest export, which is tobacco, is a declining industry, and of course transport is a substantial cost in a landlocked country.

South Africa

Difficult, in an unprecedented way

Mark Perlman, member, Persol Trading cc t/a Bargain Corner/Jayson's, family outfitter, 2 stores.
East London, E. Cape – It's been tough in an unprecedented way. We can be busy on a Tuesday and quiet on a Saturday. There's no pattern, and it's difficult to predict what to buy. The importers also don't know how much to bring in, and if you want a repeat, often there's no stock.
      However, you take what you can get, and we're scraping through, paying our accounts, taking home a bit less money.
      In my 40 years in business, I've never experienced anything like this, and I hope I don't have to call on this experience again.

Stock Exchange News Service (SENS)

TFG - Updated trading statement

Extracts from SENS report
Cape Town, W. Cape, SA - (October 23, 2020) – TFG advised shareholders that it is in the process of finalising its interim results for the six months ended 30 September 2020, which are due to be published on or about 5 November 2020.
As was announced in the Group’s trading updates on SENS on 15 May 2020, 18 June 2020, 13 July 2020 and 15 September 2020, the Group’s performance to date, has been negatively impacted by the COVID-19 pandemic, and the government-enforced lockdowns and measures taken to protect citizens in each of the Group’s major territories, South Africa, the United Kingdom and Australia.
COVID-19 pandemic and store closures: Most of the Group’s 4,083 trading outlets were closed in the month of April across all our major trading territories.
      In TFG Africa, in excess of 2 100 or c.80% of the stores re-opened from 1 May, with all 2 577 stores re-opened from the 1st week of June. While trade has steadily improved since May, it remains volatile.
      In TFG London, the regional store and concession estate gradually re-opened during May and June (in the United Kingdom from 15 June), albeit with significantly lower than usual levels of footfall. The re-opening of our city centre locations was generally held back until October, as footfall in these locations has been consistently weak, with commuter and tourist traffic slow to return, especially in central London.
      In TFG Australia, the re-opening of stores commenced end April and all 534 stores across Australia and New Zealand were reopened by the end of May. A strong improvement in trade – relative to April - was seen in the months of May to July, but overall trade in August and September was again negatively impacted by Government restrictions responding to the second wave which resulted in store closures in both New Zealand and Victoria. New Zealand had 17 stores closed for 2 weeks, however these have subsequently reopened. Victoria has had 84 stores closed from 2 August. These stores still remain closed and the Victoria State Government anticipates lifting the lockdown regulations at the end of October. Despite these government enforced interruptions, TFG Australia has proved extremely resilient and in July reported its highest EBITDA in history. Due to immediate actions taken by management, the business has remained significantly cash positive and has to date not accessed any of its borrowing facilities.
      Further lockdowns have since been announced in certain states of Australia, as well as in the United Kingdom, which will continue to adversely impact trade performance in these countries well into the second half of 2020 calendar year.
      Online turnover continues to exceed management’s expectation across all our major territories, except in the United Kingdom where online performance continues to be negatively impacted by weaker department store online channels. Online turnover from TFG London’s own sites for the six months ended September 2020 however increased marginally by 1,6% compared to the previous comparable period.
      Given the strong consumer association of our UK brands with occasion and formal workwear, it is clear that a recovery in demand for our clothing and accessories will be closely linked to the timing of a return to social mixing and in-office attendance. Taking into consideration the recent tightening of COVID-19 controls in the UK and Europe, it is increasingly likely that this recovery will be slower than originally anticipated.
      Whilst we are very cognisant of the current retail challenges in the UK, we do believe that our UK brands remain very strong within their specific categories and we are in the process of further reviewing our cost base and operating model for TFG London, to ensure that we are well positioned for recovery.
Earnings performance: As required in terms of the JSE Listings Requirements and as previously communicated to shareholders in our trading statement on 15 September, the Group expected its earnings for the six months ended 30 September 2020, to be at least 20% lower than those reported for the six months ended 30 September 2019. Interim results announcement: Shareholders are advised that the Group expects to release its interim financial results for the six months ended 30 September 2020 on SENS on or about Thursday, 5 November 2020.

Massmart - Sales update

Extracts from SENS report
Johannesburg, Gauteng, SA - (October 23, 2020) – Massmart hereby provides an update on year-to-date sales for the 9 month period ended 27 September 2020. The further easing of Covid-19 related trading restrictions marked slightly better trading conditions for the 3rd quarter of 2020. While we saw an increase in foot traffic in most of our stores...the Company estimates...the total estimated lost sales as a result of Covid-19 sales restrictions to at least R5.7 billion, when compared to the same period last year.
      Total sales for the 9 months ended 27 September 2020 amounted to R60.5 billion, representing a decrease of 8.9% on the same period last year, while comparable store sales decreased by 8.8%. Internal product inflation is estimated at 4.5%. Total sales from Massmart’s South African stores decreased by 9.4% (decreased by 8.8% on a comparable stores basis), while total sales from Massmart’s rest of Africa stores decreased by 3.8% (decreased by 5.0% on a comparable stores basis). On the back of H1 total sales decreasing by 9.7% in total, 3rd quarter sales, including the impact of the full liquor sales ban, decreased by 7.2%. This sales update information has not been reviewed or reported on by the company’s external auditors.

Rex Trueform - Further trading statement

Extracts from SENS report
Cape Town, W. Cape, SA - (October 22, 2020) – *Rex Trueform's earnings per share will decrease by 273.2%, from earnings of 206.4 cents per share, for the year ended 30 June 2019, to a loss of 357.4 cents per share for the year ended 30 June 2020; and
*Rex Trueform's headline earnings per share will decrease by 217.9%, from headline earnings of 73.1 cents per share, for the year ended 30 June 2019, to a headline loss of 86.2 cents per share for the year ended 30 June 2020.
The decrease in the Group's earnings per share is mainly attributable to following factors:
*Lost and subdued trade as a result of the COVID-19 pandemic and the government imposed lockdown regulations which negatively impacted the retail segment’s revenues and gross profit margins;
*Impairment of right-of-use assets and an increased provision for inventory obsolescence in the retail segment; and
*The implementation of the new lease accounting standard (IFRS 16 Leases) on the modified retrospective approach with no restatement of comparative results.
Further details of the Group’s financial position and performance will be made available in the annual financial results for the year ended 30 June 2020, which are anticipated to be released on or before 26 October 2020.

FLIC Trends forecast for Autumn/Winter 2021

Pietermaritzburg, KZN, SA – FLIC, through collaboration with SAFLEC, has now gained access to the WGSN trends platform. FLIC through its research on the WGSN site has put together its trend review  for the Autumn / Winter 2021 period for both Men’s and Ladies' footwear. Pop onto our FLIC website www.flicsa.co.za and go onto the trend information area of the site. FLIC trusts this will prove to be of great value to the Design and Development teams of the South African footwear industry.

Death notice

Port Elizabeth, E. Cape, SA – Alan Jackson, founder of leather dealer Alan D. Jackson, died on September 3. An obituary will appear in S&V Footwear & Leather Goods later this week

They Said It

"See. Responded like a true professional. I would’ve gabbled on and on and on .........." - Leather Link's Hugo Zuanni. He was referring to an email from Hannitan's Rudolf Hanni which will appear in S&V African Leather tomorrow.

"My wife gets the emails, and she decides what's important for me to see." - Retailer Mark Perlman of Bargain Corner in East London, E. Cape, SA.

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

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (October 12, 2020) - The current average hide price increased by 10.3% to R1.50/kg from R1.36/kg green a week ago. The current price is 146.9% higher than the average price a month ago and is 19.4% lower than the average price a year ago. The domestic hide price was at such a low level that any improvement in price is dramatic. The global hide market has seen an improvement in hide prices due to an improvement in the upholstery sector as people perform home improvements and home décor with a big push for leather upholstery.  Expectations among industry members is that prices will continue to see an improvement in the coming months until reaching a more sustainable level where prices will then likely hold. 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.

26/10/1959: Hennie van Zyl, Ostriland, Citrusdal.
26/10/1962: MH Klopper, Bethlehem Hides & Skin, Bethlehem.
26/10/1976: Santosh Baboolall, Zwartkop.
26/10/1971: Ayoob Seedat, Shoe Tech, Springs.
27/10/1949: Rolf Stumpfe, Lederwerkstatt, George.
27/10/1950: Beverly Phillips, retired, formerly Bata SA / Futura Footwear, Pinetown.
27/10/1954: AM Samaai, Just Bargains.
27/10/1965: Selvan Naicker, Ethekwini Leather, Durban.
28/10/1970: Sannet Gerber, Zoom In Shoe Boutique, Jeffry’s Bay.
30/10/1939: Peter Boudewijns, retired, formerly Badger Footwear [closed], Port Elizabeth.
31/10/19??: Ofer Ardenbaum, formerly Tiago Trading [closed]
31/10/1961: Deidre Harte, LTE, Cape Town.
01/11/19??: Bob Brown, Crown Footwear, Pinetown.
01/11/1940: Innes Rhind, retired, formerly Crispin Industries, Botswana [closed].
01/11/1942: Laurence Smith, PMC Components, Cape Town.
01/11/1957: Anthony le Roux, Agussi Crafts, Franschhoek.

In Memoriam this week

26/10/2015: Richard Reddiar (b. 29/03/1943), Premier Safety Footwear, Johannesburg.
27/10/1994: Brian Vincer (Futura).
30/10/2001: David Cairns (BASF SA).
01/11/2018: Bobby Moodley (b. 29/01/1949), Chronicle 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:
Cool Cosmos Footwear, Durban, KZN, SA. Footwear retailer.
Coqui's, Pretoria, Gauteng, SA. Men's outfitter.

Classified Adverts

Shoe Material Stock for Sale

Topside Footwear (Pty) Ltd
Please contact: Jack Liu
Cell number: 082 370 9938

AXLE CONSULTING LTD

About Our Services:
Axle Consulting UK is a marketing and strategic planning agency representing South African companies in the UK and Europe – saving you the cost, time and hassle of having to employ and send representatives from South Africa to find and/or deal with clients on ‘this side’ of the world. At very cost-effective rates, I will represent you in the UK and Europe for the following:
- Presentation of your products and services to prospective clients
- Negotiations with clients and dispute resolution
- Identifying new business opportunities
- Attendance at trade fairs and exhibitions
- Marketing and pricing strategy and research
- General business advice for the UK.

Generally, Axle Consulting works on a retainer basis, and you will receive regular and detailed reports and discussions on all marketing / research activities, client visits, opportunities and suggestions.

About me:
I have been in various business leadership positions in South Africa for the past 30 years and I understand and appreciate the world-class quality of South African products. I was previously Marketing : Key Account Manager for GST / Seton AutoLeather, proudly representing the company at major international automotive OEM clients across South Africa and Europe. From 2008-2017 I was MD/Owner of Vandan Engineering (die-making specialists) and since the sale of the business I have been consulting for various businesses ranging in size from 2-200 employees.

With extensive experience in senior level marketing and results-driven negotiations, both in South Africa and in Europe and the UK, I will ensure that your company is represented professionally, ethically and always with a keen eye on your bottom line!

Being based just outside London means that I have quick and cost-effective access to most major cities in the UK and to all parts of Europe. I also speak German, can travel visa-free in and around Europe (and to the USA), and pride myself on offering a value for money, quality service, and on building long-term, mutually beneficial business relationships.

Contact me for a no-obligation discussion:
Tel: + 44 7502 838 079 [UK] / + 27 83 2988 111 [SA – SMS only]
alex@axleconsulting.co.uk www.axleconsulting.co.uk
Director: Alex Largatzis B Com, MBL, CM(SA)

Contact us

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

Next newsletter: October 26, 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