S&V Weekly Newsletter Vol.7 No.04, Jan 25, 2021
This Newsletter is sponsored by SAFLIA
Please note: Click on any ad to go to the advertiser’s website
Business
Deadline for DTIC funding extended
Pretoria, Gauteng, SA – The deadline for applications by manufacturers for funds from the government's Working Capital Interest Subsidy (WCIS) has been extended to March 31, according to Dr Jaywant Irkhede, director: leather and footwear at the Department of Trade, Industry & Competitiveness (DTIC).
The subsidy is the initial component of the DTIC's revised Clothing & Textiles Competitiveness Programme (CTCP), now called the Clothing, Textiles, Footwear & Leather Growth Programme (CTFLGP).
The extension follows a survey in November of manufacturers done by the Footwear & Leather Industries Cluster (FLIC), which found that: 60% of manufacturers had received WCIS application forms, 20% had applied for the subsidy, 40% had requested an extension to the subsidy (which originally closed on November 30), and 20% of companies requested a WCIS workshop for further clarity.
Business
Eswatini
Luciano: Get Covid under control
By Kim Cunniffe, MD of Kingsmead Shoes
Mbabane – Antonio Navin, proprietor of the 2-store Luciano Men's Boutique, said Covid had very badly affected trading in December and January.
Luciano normally sells formal wear, "but with no weddings, no funerals, no conferences and people working from home, there's very little demand for formal wear", he said.
"It's a small country, and we need more jobs.
"Also, the government does nothing to protect us from counterfeit product.
"Above all, we need to get Covid under control."
South Africa
Pree's Outfitters: Reducing forward buy
Pretoria, Gauteng – Priyesh Vallabh, proprietor of the 1-store Pree's Outfitters, said buying stock was a challenge. "December was a bit slow, and because of an electrical problem in the area, we were without electricity for 4 days just before Christmas, which was a real problem.
"January is always quiet for us because we don't do back to school."
He said aside from cutting margins, he had cut down on the number of suppliers he bought from, and, more importantly, on forward buying.
"That's difficult because many brands want you to commit at least 6 months ahead," he said, "and they don't carry sufficient stock - i.e. even you forward book, you might not receive your order."
His customers are predominantly older men, and he carries more formal than casual footwear. However, big brands are still selling.
On Q Trend: Preparing to reboot
Pietermaritzburg, KZN – Nazia Haffejee, proprietor of the online and 1-store women's outfitter, has 2 very different businesses: An online store selling principally to professionals around the country, and a store in Manchester Rd selling mostly to hawkers, which also caters to Lesotho residents returning home each December after working in SA for a year.
Online is already the bigger part of the business, but in December it did "way better" than the store because Lesotho's border closure, and the high cost of Covid tests, meant most Lesotho citizens couldn't travel.
January so far has been slow for both divisions. "A lot of our online customers aren't back at work yet," she said. "Where we normally do 30 to 40 parcels a day, at the moment we're doing 5 or 6."
She has had to take some time off for personal reasons, but is expecting to be back shortly. In the meantime, she said, the shop has been directed to sell off old stock to hawkers in preparation for new styles.
Zimbabwe
Prime Sole: Waiting for lockdown to lift
Harare – Michelle Wilson, MD of component manufacturer and wholesaler Prime Sole, is still waiting for permission to re-open her factory - which was closed, along with most shops and factories, in the new lockdown announced on January 4.
"Technically, we're an essential service because we make components that go into police and military footwear," she said, "but we're still waiting."
She said it was a moot point, however, because the factory has been without electricity for the past 2 weeks.
The lockdown, and perhaps the 18.00 to 06.00 curfew introduced at the same time, are due to be lifted at month end.
Stock Exchange News Service (SENS)
TFG: Trading update
Shortened because of the number of SENS reports this week. For the full TFG report, go to:
http://www.sharedata.co.za/v2/Scripts/News.aspx?c=TFG&sensid=376253
Cape Town, W. Cape, SA (January 19, 2021) – In South Africa, the country reverted to adjusted Level 3 restrictions from 29 December 2020. In the UK, following the second national lockdown from 5 November to 2 December 2020, a third national lockdown was announced on 4 January 2021. In Australia, different states and territories have different levels of restrictions based on the specific number of positive cases in each region.
Despite the ongoing challenges described above, the Group continued seeking growth opportunities, and acquired the Jet business in South Africa, effective 25 September 2020 and the Jet businesses in Botswana, the Kingdom of Eswatini, Lesotho and Namibia at various effective dates in December 2020 and January 2021. Consequently, the results below include Jet, unless otherwise indicated.
Group performance update: Overall the Group delivered a solid performance during Q3 FY2021 with Group turnover growth of 5.5% compared to the same period in the previous financial year (TFG Africa and TFG Australia growing by 14.7% and 0.4% respectively as above). Group cash turnover for Q3 FY2021 grew by 14.1% (TFG Africa: 36.5%), contributing 79.9% to total turnover for the three- month period. Group credit turnover declined by 18.9% during Q3 FY2021 when compared to the same quarter in the previous financial year.
Online turnover for the Group continued to excel with growth of 32.3% (TFG Africa: 114.1%) for Q3 FY2021 compared to the same period in the previous financial year.
For the nine months to 26 December 2020, total Group turnover declined by 13.3% compared to the same period in the previous financial year (excluding Jet: -17.5%*) due to the impact of lockdowns in April and May in all our countries of operation, and subsequent periods of lockdowns in the UK and Australia as previously reported. Group cash turnover declined by 7.9% compared to the same period in the previous financial year, contributing 78.2% (comparable prior period: 73.6%) to total Group turnover for the nine months to 26 December 2021.
Group online turnover grew by 28.2% (comparable prior period: 2.9%) for the nine-month period, contributing 12.0% (comparable prior period: 8.1%) to total Group turnover.
Jet: The Group acquired certain commercially viable stores and selected assets of Jet in South Africa, effective 25 September 2020. The integration of these 382 Jet stores in South Africa has been progressing according to plan. Since our interim results announcement on 5 November 2020, we have also successfully concluded the acquisition of Jet in Botswana (14 stores), the Kingdom of Eswatini (6 stores), Lesotho (8 stores) and Namibia (15 stores). The acquisition of Jet resulted in the preservation of employment for c.5 000 Jet staff.
Richemont: Trading update 3rd quarter December 2020
Shortened because of the number of SENS reports this week. For the full Richemont report, go to:
http://www.sharedata.co.za/v2/Scripts/News.aspx?c=CFR&sensid=376291
Stellenbosch, W. Cape, SA (January 20, 2021) – Richemont released their trading update for the third quarter ended 31 December 2020.
Financial highlights:
• Sales in the quarter increased by 1% at actual exchange rates and by 5% at constant exchange rates compared to the prior year period, in a continuously volatile environment.
• Robust sales in Asia Pacific and the Middle East and Africa, both with double digit growth at actual exchange rates, more than offset single digit declines in the Americas and Japan and a marked contraction in Europe.
• A double digit increase in online retail sales and single digit progression in retail sales compensated lower wholesale sales at actual exchange rates.
The quarter under review was characterised by a varied performance across regions, with the continued spread of Covid-19 resulting in a halt in international tourism and temporary closures at points of sales in line with changing local lockdown measures. Sales progressed by 5%, driven by 25% sales growth in Asia Pacific where robust results in China (+80%) and Taiwan (China) (+29%) more than offset declines in other Asian locations. Sales in Europe contracted by 20%, affected by renewed public health protection measures and a halt in tourism. In the Americas, sales rose by 3%, supported by relatively strong domestic sales. The strong 27% sales increase in the Middle East and Africa reflected good performance across channels, resumed tourist spending in Dubai and solid domestic spending, notably in Saudi Arabia. Sales in Japan rose by 1%, benefiting from resilient local demand before public health measures were re-instated in major population centres.
The online and offline retail channels both posted sales growths, more than offsetting a decline in the wholesale channel. The retail channel recorded an 8% sales increase, driven by double digit growth at the Jewellery Maisons, despite the negative impact of temporary store closures. Retail sales were particularly strong in China, Taiwan (China), Russia and Saudi Arabia. With 17% sales growth, the online retail channel posted the strongest relative performance, thus confirming the acceleration in online luxury shopping witnessed in previous quarters. Demand was strong across many locations including China, Japan, the United States and France. Sales in the wholesale channel were 8% lower than in the prior year period, notwithstanding higher sales in Asia Pacific and the Middle East and Africa.
Corporate calendar: The Group's results for the current financial year will be announced on Friday, 21 May 2021, and its annual general meeting will be held on Wednesday, 8 September 2021.
Mr Price: Trading update
Shortened because of the number of SENS reports this week. For the full Mr Price report, go to:
http://www.sharedata.co.za/v2/Scripts/News.aspx?c=MRP&sensid=376413
Durban, KZN, SA (January 22, 2021) – During the third quarter (27 September 2020 to 26 December 2020) of the financial year ending 3 April 2021, the group continued its pursuit of further market share gains through its proven cash- based, fashion-value business model. This was achieved as market share grew 230 basis points in October and November 2020 combined, the latest period for which Retailers’ Liaison Committee (RLC) data is available. The group’s total market share during this period is the highest on record since the re-instatement of the RLC (back data to January 2017), with gains consecutively for the last six months. The group recorded growth in retail sales and other income (RSOI) of 5.0% to R7.8bn over the corresponding period in the prior year (Corresponding Period). Total retail sales of R7.5bn grew 5.8% and other income decreased 16.0% to R253m.
South African retail sales grew 5.4% to R6.9bn. Store sales were up 4.6% with the group’s online channel performing strongly, increasing 66.3% (Corresponding Period: 17.4%) over the Corresponding Period. Non-South African corporate-owned stores sales grew 10.2% to R552m. Group inflation of 6.8% was driven by price inflation of 3.8% (in line with CPI and lower than the deterioration in the foreign exchange rate) and by lower markdowns. Group GP margin of 42.5% was 50 basis points lower, as the positive gains from lower markdowns were offset by the foreign exchange impacts. Management is comfortable that it has successfully balanced its defence of key price points with its GP margin level remaining in the identified sustainable range.
Trading space increased 2.1% on a weighted average basis and 1.2% on a closing basis. The performance of the group’s diversified store footprint continues to favour convenient locations ahead of its large regional stores. Cash remains the preferred tender type of customers and the group’s private label product assortment and value price points supported cash sales growth of 8.2%, constituting 86.8% (Corresponding Period: 84.9%) of total sales. Credit sales decreased 7.6% and the group continued its conservative credit granting posture. Collections as a percentage of the debtors’ book were in line with the Corresponding Period. The additional tender type of lay-bys (introduced by Mr Price Apparel during FY2021) has been welcomed by customers, proving an attractive alternative to traditional credit and supporting the groups growth momentum.
In October 2020, group retail sales grew by double digits which continued into the first two weeks of November 2020. Economic assistance provided by the government and private sector from the start of the COVID-19 pandemic created temporary financial relief for households and supported consumer spend. Many of these support programs fell away at the end of October 2020 with the effect being felt in the latter half of November 2020. Combined retail sales in October and November 2020 grew 5.9%.
The retail sector was negatively affected in November 2020 by a weak Black Friday, with Bank Serv data reporting store card transactions declining 32.6% in volume and 51.5% in value.
The apparel segment (retail sales contribution: 74.0%) grew 3.9% over the Corresponding Period, led by the group’s largest business, Mr Price Apparel. The division entered the period in an optimal stock position, supporting its pillars of category dominance and clarity of offer. The fresh summer merchandise assortment (including its newly launched categories) and commitment to limiting price inflation, provided strong value to its customers. This resulted in lower markdowns than the Corresponding Period and supported GP margins. Mr Price Sport and Miladys fared similarly to the performance trends previously communicated on 26 November 2020 at the group’s interim results presentation.
Fairs
SLTC Convention
Johannesburg, Gauteng, SA – Warren Phipps, treasurer of the Society of Leather Technologists & Chemists (SA Section) (SLTC), confirmed last week that this year's convention, scheduled for May 14-16, is still planned to go ahead. "We've rebooked the venue," he said. "However, there is concern over whether foreign visitors will be allowed to travel, which would obviously affect many of our speakers. Therefore, we are waiting until mid-February to make a final call."
Death notices
Port Shepstone, KZN, SA – AB Gangat of May's Factory Shop died on December 30.
Johannesburg, Gauteng, SA – Elaine Coy, MD of Afro Leather, died on January 09, aged 69.
Bulawayo, Zimbabwe – Beeval Kantilal Naran, proprietor of Captain Jacob Shoes & Bag Repairs, died on January 14, aged 54.
Newcastle, KZN, SA – Idris Kajee, proprietor of Favourite Sports, died on January 15, of Covid-19, aged 70. His son, Ismail, has taken over the business.
My Mistake
I can always rely on readers to spot the - ahem - deliberate mistakes in the newsletter, such as last week when we listed hides and skins prices for January this year as January 2020.
"Happy New Year. Heads up - it's 2021," - wrote Grandt Mason of Grandt Mason Originals, Cape Town, W. Cape, SA. Added Quintin Marais of Rolfes Leather, Boksburg, Gauteng, SA: "Please check your dates on the hide prices… Jan 2020… I am sure no-one in the leather industry wants a repeat of 2020… we've all been there and got the T-shirt."
They Said It
"It would be easier to talk about peace in the Middle East." - Michael Lawrence, executive director, National Clothing Retail Federation of SA, Cape Town, W. Cape, SA, on the progress of the Master Plan for the CTFL sector.
"The UK’s latest, strict lockdown is making it quite a challenge to get in front of clients, but the vaccination roll-out program which has started is giving businesses hope that 2021 will be better than 2020." - Alex Largatzis, Axle Trading (see ad in this newsletter).
"My kids had it and were asymptomatic - but that was decades ago, in June 2020." - Leon Buhr, Equator Group director, Pinetown, KZN, SA. The pandemic has been so life-changing that it does seem to have been going on for much, much longer than a year.
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
25/01/1951: André Pelser, retired, formerly Mossop-Western Leathers, Wellington, W. Cape, SA.
25/01/1973: Reggi Xaba, Zetu Shoes, Durban, KZN, SA.
26/01/1958: André Compion, PMC, Pinetown, KZN, SA.
26/01/1962: PT Harrower, C&B Harrower Agencies, Johannesburg, Gauteng, SA.
26/01/1973: Lou Harvey, Lou Harvey Company, Durban, KZN, SA.
26/01/1982: Adeeb Moosa, Deebo Sales, Cape Town, W. Cape, SA.
26/01/19??: Jeetesh Ambaram, JFK Trading, Durban, KZN, SA.
27/01/1969: Ashraf Saley, Nizam’s Enterprises, Azaadville, Gauteng, SA.
27/01/1985: Mpumi Mazibuko, Leather Zulu, Randburg, Gauteng, SA.
28/01/1944: Martina van Jaarsveld, Martina Shoe Boutique, Brandhof, Free State, SA.
29/01/1973: Nelesh Gulab, Shawney’s Shoes/Walk Tall, Johannesburg, Gauteng, SA.
29/01/1983: Zubairr Sadak, Shoe Talk, Durban, KZN, SA.
30/01/1948: Pravin Mistry, Super Star Fashions, Vereeniging, Gauteng, SA.
31/01/1961: Andy Williams, Agent, Cape Town, W. Cape, SA.
31/01/1971: Ashley Benjamin, NULAW, Durban, KZN, SA.
In Memoriam this week
25/01/2014: Barry Kruger (b. 20/06/1944), Richleigh Shoes [closed] and Corrida Shoes, Pietermaritzburg, KZN, SA.
26/01/2006: Victor Ronald (Vic) Van Der Weele (b. 21/10/1916), SA Mercantile [closed], Cape Town, W. Cape, SA.
27/01/2008: Jacob Anagnostakis (b. 03/04/1929), Watson Shoes, Great Brak River, W. Cape, SA.
28/01/2004: David Aaron (b. 12/03/1939), Natal Shoe Components/Natalie Footwear [closed], Durban, KZN, SA.
28/01/1997: Peter O'Brien, Buckman Laboratories, Hammarsdale, KZN, SA.
29/01/1998: Peter Buglass, NPI, Durban, KZN, SA.
31/01/2016: Rudi Geyser (b. 11/03/1937), EVA Industries, Durban, 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.
Exchange rates
1. SA Rand (ZAR)/Lesotho Loti (LSL)/Namibian Dollar (NAD)/Swazi Lilangeni (SZL)
Source: http://www.x-rates.com/calculator/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/12/05 |
R18.42 |
R20.42 |
R15.20 |
R2.32 |
2020/12/12 |
R18.34 |
R20.03 |
R15.14 |
R2.31 |
2020/12/19 |
R17.81 |
R19.65 |
R14.53 |
R2.22 |
2020/12/26 |
R17.80 |
R19.68 |
R14.59 |
R2.23 |
2021/01/02 |
R17.95 |
R20.08 |
R14.68 |
R2.24 |
2021/01/09 |
R18.69 |
R20.74 |
R15.29 |
R2.36 |
2021/01/16 |
R18.39 |
R20.68 |
R15.22 |
R2.34 |
2021/01/23 |
R18.42 |
R20.71 |
R15.14 |
R2.33 |
Note: For previous rates, see HERE
2. Botswana Pula (BWP)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/12/05 |
13.36 |
14.81 |
11.02 |
1.68 |
2020/12/12 |
13.27 |
14.50 |
10.96 |
1.67 |
2020/12/19 |
13.21 |
14.58 |
10.78 |
1.65 |
2020/12/26 |
13.19 |
14.58 |
10.81 |
1.65 |
2021/01/02 |
13.17 |
14.75 |
10.79 |
1.65 |
2021/01/09 |
13.19 |
14.63 |
10.79 |
1.66 |
2021/01/16 |
13.29 |
14.93 |
10.99 |
1.69 |
2021/01/23 |
13.33 |
14.99 |
10.95 |
1.69 |
3. Malawian Kwacha (MWK)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/12/05 |
926.76 |
1027.46 |
764.52 |
117.04 |
2020/12/12 |
925.52 |
1010.82 |
764.06 |
116.73 |
2020/12/19 |
939.48 |
1036.81 |
766.84 |
117.34 |
2020/12/26 |
938.70 |
1037.73 |
769.62 |
117.63 |
2021/01/02 |
941.20 |
1053.64 |
770.57 |
118.00 |
2021/01/09 |
944.79 |
1048.60 |
772.99 |
119.37 |
2021/01/16 |
934.87 |
1050.81 |
773.46 |
119.35 |
2021/01/23 |
940.27 |
1057.01 |
772.53 |
119.19 |
4. Zambian Kwacha (ZMW)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/12/05 |
25.60 |
28.38 |
21.12 |
3.23 |
2020/12/12 |
25.61 |
27.98 |
21.14 |
3.23 |
2020/12/19 |
25.94 |
28.63 |
21.18 |
3.24 |
2020/12/26 |
25.81 |
28.53 |
21.16 |
3.23 |
2021/01/02 |
25.85 |
28.94 |
21.17 |
3.24 |
2021/01/09 |
26.02 |
28.87 |
21.28 |
3.28 |
2021/01/16 |
25.84 |
29.04 |
21.38 |
3.29 |
2021/01/23 |
26.01 |
29.24 |
21.37 |
3.29 |
5. Zimbabwean Dollar (ZWL$)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
Official US$ |
2020/12/05 |
438.69 |
486.36 |
361.90 |
55.40 |
81.87 |
2020/12/12 |
438.38 |
478.79 |
361.90 |
55.29 |
81.85 |
2020/12/19 |
443.37 |
489.30 |
361.90 |
55.37 |
81.73 |
2020/12/26 |
441.40 |
487.97 |
361.90 |
55.31 |
81.78 |
2021/01/02 |
442.03 |
494.84 |
361.90 |
55.88 |
81.78 |
2021/01/09 |
442.33 |
490.92 |
361.90 |
55.88 |
81.78 |
2021/01/16 |
437.42 |
491.67 |
361.90 |
55.84 |
82.09 |
2021/01/23 |
440.48 |
495.16 |
361.90 |
55.83 |
82.08 |
ABSA Agri Trends: Hides & skins prices
Johannesburg, Gauteng, SA (January 20, 2021) - The current average hide price increased by 3.9% to R4.03/kg from R3.88/kg a week ago. The current price is 1.2% lower than the average price a month ago and is 185% higher than the average price a year ago. Industry players are reporting reduced numbers of animals slaughtered and as such the amount of hides available on the market decreased. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Abrie Rautenbach, head Absa agribusiness, Marlene Louw, senior agricultural economist, and Paige Bowen, agricultural economist, Absa group.
Hide & skin price progression |
Date |
Hides/Kg |
Dorper/Skin |
Merino Skin |
2020/11/06 |
2.36 |
26.00 |
44.00 |
2020/11/13 |
2.38 |
23.59 |
40.00 |
2020/11/20 |
2.69 |
35.00 |
50.00 |
2020/11/27 |
3.08 |
36.00 |
49.00 |
2020/12/04 |
3.65 |
34.03 |
49.00 |
2020/12/11 |
3.68 |
33.21 |
50.83 |
2020/12/18 |
3.93 |
32.59 |
51.67 |
2020/12/25 |
4.08 |
34.39 |
51.67 |
2021/01/01 |
3.93 |
34.03 |
54.00 |
2021/01/08 |
3.88 |
31.43 |
46.43 |
Note: For previous prices, see HERE
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:
Dale Footwear, Johannesburg, Gauteng, SA. Hush Puppies licensee.
Daniel J Exclusive Fashions, Johannesburg, Gauteng, SA. Men's outfitting chain.
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: Feb 1, 2021.
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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