S&V Weekly Newsletter Vol.7 No.34, August 23 2021
This Newsletter is sponsored by SAFLIA
Please note: Click on any ad to go to the advertiser’s website
Bounty gets Vans extension
Cape Town, W. Cape, SA – In an about-face, Vans parent VF Corporation has extended Bounty Brands' distribution agreement to June 2023 - 18 months past the date it set in May this year.
No explanation has so far been given, and no announcement of what is planned after the expiry.
Warren Bowers, MD of Bounty Brands (Apparel), said on Friday he was "not in a position to comment as we are still finalizing the terms of our extension, and will release a statement when we are in a position to do so".
Vans' commission agents have similarly been given an extension by Bounty.
Cuthberts to be resurrected
Roodepoort, Gauteng, SA – Cuthberts, one of the most iconic names in SA footwear retailing history, is to be resurrected shortly. John Clarke of Custom Retail Solutions has bought the brand from Edcon. Watch this space.
Villani: Pondering a future without the Arno brand
Germiston, Gauteng, SA – The late Villani Shoes member Marco Di Lembo, who died in April, sold the Arno brand to Durban-based Tego Footwear's Mohamed Vanker 2 years ago, and was acting as a distributor for a company Vanker set up, Arno Lifestyle (Pty) Ltd.
Di Lembo's brother, Pino, who hasn't been a shareholder in or involved with Villani for a number of years, but who is now mentoring and assisting Marco's son and successor, Michele, said last week he hadn't been aware of the sale until recently.
Arno was Villani's principal men's leather moccasin, smart casual and sandal brand, dating back to the 1980s, but it has others, including the sneaker brand, Gian Luca, the fashion brand, Fabiano Ricci, and its synthetic, made-in-China brand, Umberto Battistini.
Villani closed its factory in 2015, and has been both importing and sourcing its footwear from local manufacturers, including Tego.
"I'd be interested in trying to revive the business if it's possible," Pino said, "but I'd rather walk away from it if it doesn't make financial sense."
He said Villani's executor had allowed the business to continue running under Michele, who had been working with his father, until the letter of executorship is issued. He said there were other, personal issues which further complicated the situation.
Vanker said he was awaiting the executor's report in regard to payment for footwear delivered to Villani in 2020.
Looting: The aftermath part 6
Truworths: Update on impact of civil unrest
Further to the update, the Group announced that it has been able to reopen 30 of the 57 stores that had been impacted directly and severely by the civil unrest in South Africa in July. The Group expects to have reopened a total of 48 of the affected stores by the end of August. Three more stores are scheduled to reopen around the middle of September, while the reopening dates of the remaining six stores is unknown due to the severe fire damage to the shopping centres in which they are located. All stores that were closed as a precautionary measure have resumed trading.
The Group is in the process of quantifying the losses resulting from damage to stores, the loss of stock (predominantly winter stock) and the loss of profits as a consequence of the inability to trade. The Group is working closely with its insurers to submit and finalise all claims as speedily as possible and believes that it has adequate insurance cover to mitigate much of these losses.
SENS
Mr Price: Trading update
Durban, KZN, SA (20 August 2021) – During the first 18 weeks from 4 April 2021 to 7 August 2021 of the financial year ending 2 April 2022, the group recorded growth in retail sales and other income of 48.8% to R8.6bn. This performance was supported by the inclusion of the recently acquired Power Fashion, effective 1 April 2021, and Yuppiechef, effective 1 August 2021. Excluding these acquisitions, RSOI grew 38.6% to R8.0bn.
The financial performance commentary below is against the first 18 weeks of financial year 2021 (29 March 2020 to 3 April 2021, referred to as “FY2021 Period”) and to provide a more relevant comparison due to the significant effects of the COVID-19 lockdown restrictions enforced during FY2021 (all stores closed in April 2020), commentary is supplemented with comparison against the same period in financial year 2020 (31 March 2019 to 28 March 2020, referred to as “FY2020 Period”).
The group gained 250 basis points of market share and excluding acquisitions gained 90 basis points according to the Retailers’ Liaison Committee (RLC)from April 2021 to June 2021 (the latest period for which data is available). This is a continuation from the 150 basis points of market share gained in the twelve months to the end of March 2021. The group experienced several external disruptions during the Period which impeded performance. However, market share gains were achieved despite these challenges, highlighting the resilience of the group’s fashion- value business model.
The recovery in the consumer environment was negatively affected by extended COVID-19 lockdowns which moved from less restrictive level 2 and fluctuated between more restrictive adjusted levels 3 and 4 from 15 June 2021 to 26 July 2021. The country is currently under adjusted level 3 lockdown restrictions. Significant disruption was also caused to trade and supply chain operations by the civil unrest during the month of July in KwaZulu-Natal and parts of Gauteng, two of the country’s prominent provinces (Refer SENS 14 July 2021 and 21 July 2021). Additionally, the group’s primary port of entry, Durban, had its operations disrupted intermittently by the civil unrest and an unprecedented cyber-attack. All these factors have weighed heavily on business and consumer confidence, population mobility and hampered economic activity during the Period.
The commentary below relating to key group performance metrics excludes acquisitions.
South African retail sales grew 40.7% to R7.7bn over the FY2021 Period (+8.9% on FY2020 Period). The two-year growth of 8.9% includes the effects of the COVID-19 level 5 lockdown in April 2020, subdued discretionary sales in the retail sector in June 2021, high levels of pent-up demand in the base and the store closures due to civil unrest in July 2021.
Store sales were up 40.5% over the FY2021 Period (+7.3% on FY2020 Period), a strong performance considering that at one stage 539 stores were closed during the week of civil unrest and 104 stores remained closed and did not trade for the last 3 weeks of the Period, due to either being looted or partially damaged to varying degrees. Non-South African corporate-owned stores sales grew 33.2% to R546m over the FY2021 Period (+4.6% on FY2020 Period).
The group’s online channel continues to perform strongly, increasing sales 46.4% over the FY2021 Period (+103.2% on FY2020 Period), and contributing 2.9% to sales (1.6% in FY2020 Period).
Unit sales grew 34.4% over the FY2021 Period (-0.9% on FY2020 Period) and inflation was up 5.2% over the FY2021 Period (+10.1% on FY2020 Period).
The group’s diverse store footprint expanded by 211 stores from its financial year ending 3 April 2021(acquisitions: 181; new stores: 30) to total 1 629, offering accessible and convenient shopping locations for its customers. Trading space increased 5.2% (1.6% excluding acquisitions) over the FY2021 Period on a weighted average basis.
The prevailing consumer environment continues to see customers favouring cash transactions, and as a result the group increased cash sales 39.7% over the FY2021 Period (+11.5% on FY2020 Period), constituting 84.9% (82.7% in FY2020 Period) of total sales. The group has seen an improvement in credit sales, which grew 42.4% over the FY2021 Period (-5.3% on FY2020 Period), driven by an increase in new and existing account sales. Credit sales are approaching pre COVID-19 levels, despite a marginally lower account base due to consolidation during the FY2021 Period. The group continues to be prudent in its credit granting criteria due to the volatility of the consumer environment.
In the apparel segment, the group’s largest division, Mr Price Apparel has gained market share for 15 consecutive months, highlighting its strong customer value proposition. This has been achieved through its differentiated fashion merchandise and an intentional strategy to enhance the value offered to its customers. Miladys, which competes in a niche segment of the apparel market, has made good progress in countering the challenging consumer trends it has faced during the COVID-19 pandemic. It has successfully launched an online platform and traded into higher demand categories, resulting in market share gains in all 3 months during the Period. The recently acquired Power Fashion business, which competes in the lower-income segment of the market, also gained market share during the Period. Mr Price Sport performed strongly, albeit off a lower base than the rest of the group, but continues to face trading challenges due to the ongoing COVID-19 restrictions which have negatively affected schools, sports clubs and gyms.
Due to the extended COVID-19 lockdowns, the homeware trend has continued, and the home segment performed strongly. Mr Price Home and Sheet Street collectively gained 150 basis points of market share during the period. Cellular handsets and accessories increased sales 11.2% over the FY2021 Period (41.8% on FY2020 Period). Products are available in 371 stores and online, supporting further market share gains during the period according to Growth from Knowledge.
Other income grew 4.3% to R291m over the FY2021 Period (-10.5% on FY2020 Period). Debtors’ interest and fees were adversely affected by a reduced debtors’ book and lower repo rates.
Civil Unrest
The group previously communicated on 14 and 21 July 2021 that the civil unrest that took place in KwaZulu-Natal and in parts of Gauteng resulted in 111 stores closing. The group continues its assessment of the damage but is confident that it is adequately covered for its incurred losses through its riot wrap cover (business interruption covering lost gross profit from day 15 up to 12 months) and SASRIA insurance cover (physical damage to fixed assets and stock loss). The fully quantified insurance claims and GP margin impact are scheduled to be communicated at the interim results presentation in November. Shareholders are advised that accounting for the losses may take place in a different reporting period than when the insurance recovery is recorded. We are proud of our associates and partners for their efforts in ensuring that the affected stores become operational as soon as possible. Of the 111 stores, the group estimates that approximately 75% of these will be re-opened by the end of September 2021. An additional 10% of stores will re-open by the end of FY2022 with the outstanding balance of stores expected to re-open during FY2023.
Outlook
The group anticipates the consumer environment to remain constrained. The South African economy continues to feel the impact of the ongoing COVID-19 restrictions, exacerbated further by the slow pace of the vaccination roll-out. The recent civil unrest has added strain to the country’s GDP growth recovery. In this challenging environment consumers will become increasingly value conscious. The group is confident that its fashion-value merchandise offering is well positioned to build on the market share gains from the last year. Its recent acquisitions add further strength to its ability to increase its share of wallet in its two primary segments.
International port congestion and global supply chain imbalances are having a material impact on distribution operations and costs, and on the economy as a whole. In line with the rest of the sector, the group is experiencing the negative impact of these disruptions and anticipates it to continue into the second half of FY2022. The group’s inventory position at the end of the period was higher than planned due to the temporary store closures during the week of civil unrest. In addition, the total apparel and homeware market reported subdued sales growth in June 2021 (RLC decreased 3.8%), a similar trend experienced by the group, further compounding the stock position. The terminal winter component of this inventory is not significant, and management are focused on ensuring that the non-seasonal stock position improves throughout the remainder of FY2022. Consumers remain constrained and protecting them from inflation pressure is a priority in ensuring that the group’s everyday low-price promise is delivered.
The group anticipates that it will report a reduced GP margin in H1 as a result of the following factors: inventory write-offs due to the civil unrest (recoveries from insurance claims will be accounted for under other sundry income); markdown levels have been acceptable but are higher than the historically low levels reported in the FY2021 Period; and the inclusion of acquisitions which trade at lower margins than the group. The non-recurring credits in the H1 expense base (rental relief and government support initiatives) will impact expense growth and management continues to apply its disciplined approach to cost control.
The group’s cash-based, omni-channel business model has proven extremely resilient over the last 35 years. Despite the store closures and fully funded acquisitions, the group’s cash balance remains healthy at R4.2bn. Our associates have consistently and proudly lived the group’s beliefs of passion, value and partnership through the events over the last 18 months. We extend our sincere gratitude to them for their commitment to the group and to all stakeholders for their understanding and support.
Fairs
Allfashion Sourcing dates change
Cape Town, W. Cape, SA – Messe Frankfurt has changed the dates of Allfashion Sourcing from 14-16 September to 19-21 October 2021.
They Said It
"It was an 'Oops!', not an 'Oh No!'" - IT consultant Glen Martin to me after I had done something stupid (again) on my laptop.
"I don't get to the pub too much anymore, which is a pity." - Retired former Conshu director Joe McGinley.
"Please use the source ‘The Randburg Runner’ and not ‘The Runner Group’ as there is only one of me left…as always!!" - The Randburg Runner's Gordon Howie.
"Our cash flow is not yet where we would prefer it to be." - Afro-Thai Imports' Morné Howell.
Directory and Calendar updates
The S&V Directory and the S&V Calendar are dynamic documents, undergoing ongoing constant updating. Readers are therefore advised to refer to them at least once a week.
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
23/08/1947: Leon Volschenk, Leo D’ Mar, Great Brak River, W. Cape, SA.
23/08/1949: David Sheppard, DP Sheppard & Co, Port Elizabeth, E. Cape, SA.
23/08/1965: Glyn Giani, the Footwear Design & Technology School of SA, Pinetown, KZN, SA.
23/08/1971: Raymond Schutte, agent, Pretoria, Gauteng, SA.
24/08/1940: Fred Carpel, agent, Johannesburg, Gauteng, SA.
24/08/1944: Rolf Oltmanns, retired, PMC Group, Pinetown, KZN, SA.
24/08/1957: Clive Wood, Crown Footwear, Pinetown, KZN, SA.
24/08/1961: Ulf Oehl, Stahl SA, Midrand, Gauteng, SA.
25/08/1957: Judy Ambrose, left the industry, formerly agent, Durban, KZN, SA.
25/08/1970: Imran Mahomed, Mr American, Malelane, Mpumalanga, SA.
25/08/1972: Andrew Fenwick, Saddler Belts & Leathercraft, Durban, KZN, SA.
25/08/1978: Adrian Ramsamy, Novita Shoes, Durban, KZN, SA.
25/08/1980: Yvonne Speirs, Fusion Leather, Durban, KZN, SA.
25/08/19??: Anthea Ball, Adidas, Cape Town, W. Cape, SA.
26/08/1971: Sadia Edries, Rizzo Sales, Cape Town, W. Cape, SA.
27/08/1945: Krish Gangiah, Impact Footwear, Durban, KZN, SA.
27/08/1962: Vidrik Thurling, Thurling Investments, Cape Town, W. Cape, SA.
28/08/1947: Kathy Graham, retired, formerly Bagshaw, Port Elizabeth, E. Cape, SA.
28/08/1964: Maon Saxe, Lonshoe Holdings, Cape Town, W. Cape, SA.
28/08/1969: Craig Munro, ? formerly Crafcor Hart Hides (closed), Pietermaritzburg, KZN, SA.
29/08/1961: Steve Miller, Queue, Cape Town, W. Cape, SA.
29/08/1976: Minesh Gangiah, Impact Industries Footwear Manufacturers, Durban, KZN, SA.
29/08/????: Indira B Ambaram, JFK Trading, Durban, KZN, SA.

In Memoriam this week
23/08/1950: Andy Thuysman, In Step Leather Craft, Jeffrey's Bay, E. Cape, SA.
27/08/2006: Keith Barkus (b. 08/04/1954), agent, Durban, KZN, SA.
28/08/1997: Richard Denton (b. 24/06/1914), Ricmar group [closed], Durban, KZN, SA.
28/08/2013: Tony Denton (b. 06/03/1943), Ricmar group [closed], Himeville, 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 ¥ |
2021/06/26 |
R16.88 |
R19.63 |
R14.14 |
R2.19 |
2021/07/03 |
R16.91 |
R19.70 |
R14.25 |
R2.20 |
2021/07/12 |
R17.04 |
R19.91 |
R14.35 |
R2.21 |
2021/07/17 |
R17.02 |
R19.85 |
R14.42 |
R2.22 |
2021/07/24 |
R17.48 |
R21.41 |
R14.85 |
R2.29 |
2021/07/31 |
R17.33 |
R20.30 |
R14.60 |
R2.26 |
2021/08/09 |
R17.33 |
R20.45 |
R14.76 |
R2.27 |
2021/08/14 |
R17.37 |
R20.42 |
R14.72 |
R2.27 |
2021/08/21 |
R17.88 |
R20.82 |
R15.28 |
R2.35 |
Note: For previous rates, see HERE
2. Botswana Pula (BWP)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2021/06/26 |
12.97 |
15.09 |
10.87 |
1.68 |
2021/07/03 |
12.95 |
15.09 |
10.91 |
1.68 |
2021/07/12 |
12.96 |
15.15 |
10.92 |
1.68 |
2021/07/17 |
12.95 |
15.11 |
10.97 |
1.69 |
2021/07/24 |
13.06 |
15.25 |
11.09 |
1.71 |
2021/07/31 |
13.20 |
15.47 |
11.12 |
1.72 |
2021/08/09 |
12.99 |
15.33 |
11.06 |
1.70 |
2021/08/14 |
13.12 |
15.43 |
11.13 |
1.71 |
2021/08/21 |
13.25 |
15.42 |
11.32 |
1.74 |
3. Malawian Kwacha (MWK)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2021/06/26 |
961.88 |
1118.55 |
805.90 |
124.84 |
2021/07/03 |
958.45 |
1116.77 |
807.73 |
124.79 |
2021/07/12 |
952.21 |
1112.73 |
802.19 |
123.93 |
2021/07/17 |
955.84 |
1115.17 |
809.54 |
124.94 |
2021/07/24 |
955.43 |
1115.52 |
811.65 |
125.23 |
2021/07/31 |
965.02 |
1130.54 |
813.06 |
125.83 |
2021/08/09 |
957.51 |
1129.86 |
815.31 |
125.70 |
2021/08/14 |
960.30 |
1129.20 |
814.20 |
125.70 |
2021/08/21 |
952.51 |
1109.03 |
814.07 |
125.21 |
4. Zambian Kwacha (ZMW)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2021/06/26 |
27.04 |
31.46 |
22.66 |
3.51 |
2021/07/03 |
26.95 |
31.40 |
22.71 |
3.50 |
2021/07/12 |
26.89 |
31.42 |
22.65 |
3.49 |
2021/07/17 |
26.73 |
31.18 |
22.64 |
3.49 |
2021/07/24 |
24.77 |
28.92 |
21.04 |
3.24 |
2021/07/31 |
22.91 |
26.84 |
19.30 |
2.98 |
2021/08/09 |
22.63 |
26.70 |
19.27 |
2.97 |
2021/08/14 |
22.83 |
26.85 |
19.36 |
2.98 |
2021/08/21 |
22.20 |
25.85 |
18.97 |
2.91 |
5. Zimbabwean Dollar (ZWL$)
Source: https://www.xe.com/currencyconverter/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
Official US$ |
2021/06/26 |
431.93 |
502.29 |
361.90 |
56.06 |
85.36 |
2021/07/03 |
429.42 |
500.36 |
361.90 |
55.91 |
85.42 |
2021/07/12 |
429.43 |
501.85 |
361.90 |
55.90 |
85.50 |
2021/07/17 |
427.41 |
498.50 |
361.90 |
55.85 |
85.50 |
2021/07/24 |
426.00 |
497.38 |
361.90 |
55.83 |
85.63 |
2021/07/31 |
429.54 |
503.21 |
361.90 |
56.00 |
85.64 |
2021/08/09 |
424.85 |
501.36 |
361.90 |
55.79 |
85.72 |
2021/08/14 |
426.81 |
501.91 |
361.90 |
55.87 |
85.74 |
2021/08/21 |
423.44 |
493.02 |
361.90 |
55.66 |
85.82 |
ABSA Agri Trends: Hides & skins prices
Johannesburg, Gauteng, SA (19 August, 2021) - The current average hide price decreased by 1.72% to R9.70/kg from R9.93/kg a week ago. The current price is 0.73% higher than the average price a month ago and is 1573% higher than the average price a year ago. The range of prices reported was as follows: Minimum price: R7.22, Maximum price: R11.00. Please note, we have changed our methodology and price levels are not directly comparable to previous prices that we reported on. Our methodology weighs the prices we collect according to the number of hides they sell in a month. This is done to make it more representative of the prevailing market price. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Marlene Louw, senior agricultural economist, and Nkhensani Mashimbyi, 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 |
2021/12/25 |
4.08 |
34.39 |
51.67 |
2021/01/01 |
3.93 |
34.03 |
54.00 |
2021/01/08 |
3.88 |
31.43 |
46.43 |
2021/01/15 |
4.03 |
31.43 |
46.43 |
2021/01/22 |
4.16 |
30.00 |
47.00 |
2021/01/29 |
4.04 |
33.05 |
50.83 |
2021/02/05 |
3.86 |
31.41 |
45.71 |
2021/02/12 |
4.33 |
35.46 |
45.83 |
2021/02/19 |
4.29 |
34.49 |
50.00 |
2021/02/26 |
4.94 |
34.70 |
47.50 |
2021/03/05 |
5.67 |
38.33 |
51.67 |
2021/03/12 |
4.80 |
42.50 |
59.17 |
2021/03/19 |
4.99 |
35.74 |
52.86 |
2021/03/26 |
6.33 |
35.16 |
55.00 |
2021/04/02 |
6.50 |
31.83 |
49.00 |
2021/04/16 |
8.98 |
37.44 |
50.00 |
2021/04/22 |
8.37 |
|
|
2021/04/29 |
8.98 |
40.96 |
62.00 |
2021/05/06 |
7.56 |
40.96 |
62.00 |
2021/05/24 |
7.82 |
40.83 |
61.67 |
2021/05/28 |
7.47 |
|
|
2021/06/14 |
8.34 |
40.83 |
61.67 |
2021/06/24 |
8.31 |
|
|
2021/07/02 |
8.25 |
42.21 |
66.00 |
2021/07/09 |
9.53 |
46.39 |
64.00 |
2021/07/16 |
8.17 |
39.00 |
61.00 |
2021/07/23 |
8.44 |
43.33 |
67.50 |
2021/07/30 |
7.57 |
39.00 |
61.00 |
2021/08/06 |
9.60 |
39.63 |
64.00 |
2021/08/12 |
9.93 |
|
|
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:
Featherby's For Shoes, East London, E. Cape, SA. Women's footwear and accessories retailer.
Feathers Boutique, Naboomspruit, Limpopo, SA. Women's boutique.
Classified Adverts
Lorraine Carol McDonald
Is seeking employment in a secretarial or personal assistant (PA) position in a vibrant and dynamic organization, utilizing my skills and abundant experience to contribute to its future success.
Editor's note: If her surname looks familiar, it should. Lorraine is the wife of footwear production man Dave McDonald, so she is familiar with footwear terms and needs. She also worked for adhesive supplier Genkem when it was a major supplier to the footwear industry.
A comprehensive CV, with references, is available.
She can be contacted at lorrainemcdonald733@gmail.com , 082 337 2831.
Contact us
News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za
Next newsletter: August 30, 2021.
SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za
Our website www.svmag.co.za
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