S&V Weekly Newsletter Vol.7 No.03, Jan 18, 2021

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Business

South Africa

Jumbo: 'You have to be nimble'

East London, E. Cape – Alan Scheckter, MD of Edgray Distributors (Pty) Ltd, t/a Jumbo Clothing, said December turnover was "slightly down on like-for-like stores" on the previous year.
      "As a value driven business, we've stayed relatively strong," he said, "though there are challenges."
      Among those challenges are importing, "which now takes much longer", and planning, "because you don't know what's coming next. You have to be nimble."
      He said January, so far, has been "tough", especially with the uncertainty over back-to-school trading.
      Nonetheless, after closing 3 underperforming stores in Johannesburg in December, Jumbo is opening its 84th store in Sterkspruit, a small town in the E. Cape, next month. "We're not actively looking for new sites," he said, "but where there are opportunities, we'll take them."

Kingsmead: Okay, 'all things considered'

By Kim Cunniffe, MD of Kingsmead Shoes
Durban, KZN – December turnover was slightly below budgeted but I was reasonably satisfied when all factors were taken into account.
      December trade started off well but was affected by the lockdown announcements with sales dropping from the 2nd week of December and picking up again from the 15th December, but dropped off again when lockdown announcements made on the 28th December.
        Our non-coastal stores all traded well over December due most likely to a greater percentage of customers staying at home up country.
      January has been very challenging to date with the larger malls being affected the worst. Just no feet in the malls. Customers are scared!
      We have put on more promotions than usual.
      With regards imports, prices of shipping, etc., have soared over this last period which has been challenging, but we have a handle on it now.  Product sourcing has not really been affected - just adapted with technology etc.
        Demand for formal footwear has dropped significantly.
      Kingsmead opened 5 stores last year, taking it to 40 stores, and will continue to look for growth opportunities as they arise.
      We are also committed to helping local suppliers and have being making an effort to shift to more local suppliers where we can.

Pick 'n Wear: Aiming to halt decline

Johannesburg, Gauteng – Zeenat Cassim, member of Pick 'n Wear cc, said the business had seen turnover drop gradually for several years, with a steep drop in December.
      "December turnover was 40% down on the previous year, and yesterday we had record low sales," she said.
      Pick 'n Wear has reduced its buy, and reduced stock levels, "but that of course is a Catch 22 situation". It is also rotating staff.
      Pick 'n Wear sells men's and boys' branded casual clothing and footwear.
      "This business has been going for 44 years. My brother, Anver, has been here 32 years, and I've been here for 22 years.
      "We will be taking a hard look at the way forward."

Sportscentre: Adapting to different activities

Plettenberg Bay, W. Cape – Deon Coetzer, member of Sportscentre cc, said he had had to adapt his business to cope with ongoing restrictions on sport.
      "We're selling much more outdoor and angling footwear and clothing than sportswear," he said. "The 'Big 5' or 'Big 7' or 'Big 9' - the team sports - are dead at the moment. The lesser sports, like darts, are still popular."
      He said with the beach closures and the sports ban, December and January so far had been "shocking".
      "I don't know when to order," he said. "You can always formulate a plan in business, but not when there's so much uncertainty."
      If 'when' was difficult, 'what' was less so: "We'll look at what's been selling for the last 8 months," he said.
      Sportscentre saw its online division flourish - "it's what saved us during the hard lockdown" - but he said online had become crowded.
      "The future? Ask Ramaphosa when sports can restart."

Stock Exchange News Service (SENS)

Truworths:

Cape Town, W. Cape, SA (January 15, 2021) – Truworths International Limited announces that both of its main markets, South Africa and the UK, continue to be affected materially by the impact of the COVID-19 pandemic. While there have not been any further hard lockdown restrictions in South Africa since the Group was allowed to reopen its stores in May 2020, consumer spending remains subdued in the wake of the ongoing economic crisis resulting from the severe negative impact of the pandemic, and generally depressed economic conditions. In the UK, trading conditions have been exceptionally challenging amidst Brexit uncertainty, with the Group’s stores having to close from 5 November 2020 to 2 December 2020 (except for ‘click & collect’ orders) as all non-essential retail activity was suspended in an attempt to curb the spread of the virus. The government has again imposed a national lockdown in January 2021 forcing the Group to close its stores in the UK.
      Group retail sales for the 26-week period ended 27 December 2020 (the ‘current period’) decreased by 8.5% to R9.7 billion relative to the R10.6 billion reported for the 26-week period ended 29 December 2019 (the ‘prior period’). Account sales comprised 51% (2019: 52%) of Group retail sales for the current period, with account sales decreasing by 10.3% and cash sales decreasing by 6.5%, relative to the prior period.

Truworths Africa: Retail sales for Truworths Africa (being the Group, excluding the UK-based Office segment and comprising mainly of the Truworths businesses in South Africa) decreased by 6.8% to R7.3 billion relative to the prior period’s R7.8 billion, with account sales decreasing by 10.3% and cash sales increasing by 1.9%. Account sales comprised 68% of these retail sales (2019: 71%). Trading space decreased by 1% relative to the prior period and is expected to remain unchanged for the 2021 financial year. There was no product inflation (or deflation) in the current period (2019: 1.1% inflation), while like-for-like store retail sales decreased by 8% (2019: increased by 1%).
      Gross trade receivables in respect of the Truworths Africa debtors book (relating to the Truworths, Identity and YDE businesses) were at R5.8 billion (2019: R6.8 billion), while the number of active accounts decreased by 6% to 2.6 million. Active account holders able to purchase and overdue balances to gross trade receivables were at 85% (December 2019: 85%, June 2020: 77%, and October 2020: 83%) and 12% (December 2019: 10%, June 2020: 20%, and October 2020: 15%) respectively, evidencing the signs of improvement in the overall quality of the book since June 2020 as announced in November 2020.

Office: Retail sales for the Group’s UK-based Office segment decreased in Sterling terms by 24.6% to £114 million relative to the prior period’s £151 million. In Rand terms, retail sales for Office decreased by 13.3% to R2.4 billion. Office continues to benefit from its strong online presence, with online sales contributing approximately 59% (2019: 34%) of retail sales for the current period. Trading space for the Office segment decreased by 17% relative to the prior period and is expected to decrease by approximately 21% for the 2021 financial year.

Earnings: Amidst these challenging trading conditions, the Group estimates that its headline earnings per share (‘HEPS’) for the current period will decrease by between 4% and 9% to between 332 cents and 350 cents relative to the prior period HEPS of 364.9 cents. The Group further estimates that its earnings per share (‘EPS’) for the current period will decrease by between 14% and 19% to between 295 cents and 314 cents relative to the prior period EPS of 364.7 cents. The higher decline in EPS compared to HEPS is attributable to an impairment of £8 million in the current period of Office’s right-of-use assets in respect of retail store leases, as lockdown restrictions on non-essential retail in the UK and Europe continue to put pressure on store-based retailing.
      Shareholders are advised that this business update does not constitute an earnings forecast, that the financial information provided herein is the responsibility of the directors, and that such information has neither been reviewed nor reported on by the Group’s external auditors. The Group’s interim results for the 26-week period ended 27 December 2020 are scheduled for release on or about Thursday, 18 February 2021.

Death notices

Durban, KZN, SA – Yusuf Bham, former owner of importer/wholesaler Megashoes, died on December 26.
Durban, KZN, SA – Alvin Naidoo, factory manager of Angel Footwear, died on January 01, aged 50.
Durban, KZN, SA – Rajen Pillay, owner of footwear manufacturer SOP Trading, died on January 13, aged 56.

They Said It

"Please tell Andy Williams not to complain. I turned 80 last week which is the new 60. By the way the late Roy Eckstein would also have turned 80 in October this year." - Dieter Zettler, retired, former director of Paul Moeller & Co., Pinetown, KZN, SA, and clearly someone who is living retirement to the full.

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

3. Malawian Kwacha (MWK)

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

4. Zambian Kwacha (ZMW)

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

5. Zimbabwean Dollar (ZWL$)

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

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (January 13, 2020) - The current average hide price decreased by 1.3% to R3.88/kg from R3.93/kg green a week ago. The current price is 5.6% higher than the average price a month ago and is 174.2% higher than the average price a year ago. Industry players are reporting that the number of animals slaughtered over the festive season declined and as such the amount of hides available on the market decreased. Majority of players are currently receiving a price of approximately R4.00/kg depending on the quality of the hide. 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.

18/01/1977: Guy Millar, Rags on Trend, Midrand, Gauteng, SA.
19/01/1960: Saleem Khamissa, His Place, Port Shepstone, KZN, SA.
23/01/1943: Pat Ward, left industry, ex-RPM Shoes [closed], Durban, KZN, SA.
23/01/1944: Gerrie Botha, Steps Shoes @ Barclay, Pretoria, Gauteng, SA.
23/01/1964: Lesley Williams, Lesley Williams Agencies, Bulawayo, Zimbabwe.
24/01/1937: Dan Naidoo, Togo Shoes, Pietermaritzburg, KZN, SA.
24/01/1969: Yolander Lotter, Comfy Feet Shoes, Jeffrey’s Bay, E. Cape, SA.

In Memoriam this week

18/01/2002: Frank Mellon (b. 04/02/1930), Valmell Components, Durban, KZN, SA.
19/01/2005: Thomas Anthony (Tony) O’Sullivan (b.08/06/1928), Vogue Shoes and others [closed], Cape Town, W. Cape, SA.
20/01/2010: Johan Bester (b. 08/11/1936), ProGlove, King William’s Town, E. Cape, SA.
22/01/1997: Charles Lintner, Bata SA, Pinetown, KZN, SA.

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.

Classified Adverts

Design department manager seeks post

Devrajah (Teddy) Moodley, who had 31 years' experience with Michelle Footwear and was design department manager, followed by 2 year with Caprini Footwear as technical manager, seeks employment. He is prepared to relocate outside of Durban if required.       A full CV, including references from both companies, is available. Please reply to 083 280 6915, moodleyteddy8@gmail.com

Contact us

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

Next newsletter: Jan 25, 2021.

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