S&V Weekly Newsletter Vol.8 No.05, January 31 2022

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The sneaker debate

It's not so simple to re-establish what was

By Raf Mahomed, Kayo Shoes
Durban, KZN, SA – I have read your last edition on sneakers, and the topic in itself is very broad. However, I think for local manufacturers to make sneakers, it's going to be very difficult. There are a few reasons for me saying so.
      Firstly we don't have the skills. If there are a few left, then they are too old to work or tutor.
      We lack resources in terms of technology.
        Most sneakers today are stuck-ons - either rubber or a combination of rubber and EVA. Apart from the safety shoe industry, there are no local rubber sole manufacturers with up-to-date fashion soles to service the industry. In terms of upper construction, we are restricted as most uppers are prime knits, and we have little to no knowledge of constructing these types of uppers. Sourcing uppers from the East is becoming expensive and doesn't give us an edge to compete with finished products coming out of China.
      Branding is also a big issue, as it is very difficult to compete against fake branded products with non-branded products. The closure of Kayo shoes in 2016 was not because we couldn't make sneakers but because we could not compete with fakes. It would be very interesting if someone came up with the proposal to restart vulcanized footwear is SA. I would give my full support from technical to finished product.
      I trust my 2 cents' worth can help.

The MasterPlan

TFG: No plans to acquire footwear, leather goods plants

Cape Town, W. Cape, SA – A report in the Financial Mail showed that The Foschini Group has invested substantially in acquiring its own local clothing factories.
      In response to a query to TFG CEO Anthony Thunstrӧm as to whether the group was considering similar investments in footwear and/or leather goods manufacturing, he wrote: "Having recently acquired a number of clothing manufacturing assets as well as the Granny Goose / Cotton Traders business I think we will be focussed on these areas for the time being."

Logistics

SARS claims improvements in dealing with traders and seizing illicit imports

Pretoria, Gauteng, SA (26 January 2022) – In a press release, the Commissioner of the South African Revenue Service (SARS), Edward Kieswetter, "committed the SARS Customs division to scale up digital transformation and to increase the use of data to improve the facilitation of trade, revenue collection and improve compliance by traders who import and export goods across South Africa’s borders".
      He said that the Customs Modernisation Programme, which uses digital transformation and the use of data, has led to an improvement in the average  case turn-around time on interventions by 22% as at December 2021; frontline interventions came down from an average of 109 hours in March 2020 to 38 hours as at December 2021, and reduced the stop rate for Authorised Economic Operators by 86% leading to savings in cost and time.
      “We have improved our risk-based interventions to detect and deter illicit trade, by an average success rate of 54% by the end of December 2021, which has raised an additional R2-billion in revenue.
      “As at December 2021, SARS Customs more than doubled the value of seizures compared to the previous year, from R1.5-billion to R3.5-billion, including narcotics, clothing and textiles.”
      He said several other initiatives, built on increased use of data and expanding the data eco-system, were making significant progress as part of the SMART border concept.
      “We are currently piloting the number plate recognition system at Beit Bridge with the help of key stakeholders such as the Freight Association and Technical Services Providers Association. More than 99% of all cross-border truck manifests are now reported electronically to SARS prior to the arrival of the truck at the border, that includes the truck registration details.”
      He said that to extend further practical benefits to traders and increase compliance, the Single Window platform is being implemented, in partnership with Transnet. The platform will allow marine carriers to submit reports once to both entities to improve port efficiencies.
      The implementation in partnership with Transnet will be followed by a National Single Window to enable traders to submit all cross-border documents through a single point of entry to government and enable other border agencies to view, stop and detain goods for agricultural, health and safety concerns.
      “Another project to combat illicit financial flows, brings together data from SARS, commercial banks and the South African Reserve Bank.”
      He said SARS had started its journey of modernisation and embracing a technology enabled and insight-driven culture as part of its DNA. However, SARS will need partnerships built on mutual respect, trust and a commitment to serve the greater public good.

The lockdown

Schools expected to reopen fully

In a report last Wednesday, News24 said the government is expected to announce the ending of the rotational school learning system, which will allow the return of all pupils to classrooms.
      Currently, over 80% of South African schools are still operating on a rotational basis, where each child only attends school half of the time, on alternate days or weeks.

Stock Exchange News Services (SENS)

AVI - trading statement and update

Group sales up 2.3%, footwear & apparel down 1.2% for 6 months to December
Johannesburg, Gauteng, SA (Tue 25 Jan 2022, 15:19) – Group revenue increased by 2.3% over the same period last year. Revenue from the footwear and apparel business was 1.2% lower with the lost sales from the July unrest, stock availability challenges and unplanned outages not fully recovered by pleasing growth of 7.4% in December sales, over the prior year.

Consolidated headline and attributable earnings: *Consolidated headline earnings per share for the six months ended 31 December 2021 are expected to increase by between 5.5% and 7.5% over the prior year, translating into an increase from last year’s 297.3 cents to a range of between 313.6 and 319.6 cents per share; and
*Consolidated earnings per share for the six months ended 31 December 2021, including capital gains and losses, are expected to increase by between 5.5% and 7.5% over the prior year, translating into an increase from last year’s 296.6 cents to a range of between 313.0 and 318.9 cents per share.

It is expected that AVI will release its full results for the six months ended 31 December 2021 on or about 7 March 2022.

Note: AVI CEO Simon Crutchley has declined a request from S&V for an interview on the group's footwear division, stating that "he does not wish to engage at the present time".
  

Pepkor - trading update

Sales up 1.3% for 3 months to December
Cape Town, W. Cape, SA (Thu 27 Jan 2022, 8:10) – Revenue for the quarter ended 31 December 2021 increased by 1.3% to R22.8 billion. Excluding the disposal of John Craig in the prior year revenue increased by 1.8%. Growth in revenue was impacted by the strong base in the comparable quarter in the previous financial year and 161 looted stores that had not yet reopened at the start of the quarter following the civil unrest in Kwa-Zulu Natal and Gauteng during July 2021. Lower revenue in the Fintech segment resulting from a change in product mix and accounting treatment further weighed on group revenue growth.
      The process to refinance funding of R5.0 billion repayable in the 2023 financial year is progressing well and is expected to be completed by March 2022. The funding will be extended over a longer term at lower interest rates and will further strengthen the group’s liquidity and debt repayment profile.
      During the quarter ended 31 December 2021 the group opened a total of 102 new stores and Pepkor’s growth plans remain on track to open more than 300 new stores in the current financial year.

Shoprite - Operational update

Sales up 10% for 12 months to December
Cape Town, W. Cape, SA (Thu 27 Jan 2022, 9:08) – The Shoprite Group increased total sale of merchandise by 10.0% to approximately R91.1 billion. Excluding the impact of the temporary closure of the Supermarkets RSA LiquorShop business due to COVID-19 lockdown regulations, the Group increased sales by 8.2%. The Group added a net of 57 stores to its corporate supermarket business to end the period with 2 003 supermarkets. The Group's OK Franchise business, excluding the one store permanently closed due to civil unrest, closed a net. of one store to end with 511 stores.

Death notice

Pietermaritzburg, KZN, SA – Dan Naidoo, formerly with Martin Johnson and later founder of Togo Shoes, died on 13 January, 11 days before his 85th birthday, after a long illness.

They Said It

"I'd like to get to 90 so I can shoot my age on the golf course. My mother lived to 101, and they say I've got her genes." - Rob Steadman, National Trimmings Specialists, Durban, KZN, SA, who turns a relatively youthful 75 tomorrow. He plays golf 3 times a week, and added: "Sometimes my golf gets so bad I have to go to work." He spent many years in Pretoria, trading as JoJoIVU.

Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the industry that you'd like to share with the industry? - tony@svmag.co.za

31/01/1961: Andy Williams, Agent, Cape Town, W. Cape, SA.
31/01/1971: Ashley Benjamin, NULAW, Durban, KZN, SA.
01/02/1947: Rob Steadman, National Trimmings Specialists, New Germany, KZN, SA.
01/02/1952: Thomas Bredenkamp, Promark, Pretoria, Gauteng, SA.
01/02/19??: Elaine Smith, the DTI, Pretoria, Gauteng, SA.
01/02/1969: Noeline Kemp, Knots, Bloemfontein, Free State, SA.
02/02/1941: George Geyser, Dancewell, Durban, ZN, SA.
02/02/1946: Chris Schroeder, retired, formerly PMC Group, Pinetown, KZN, SA.
02/02/1965: Rod Oliveira, Rodrigo Shoes, Durban, KZN, SA.
03/02/1963: Vusumzi Mabuto, NULAW, Port Elizabeth, E. Cape, SA.
03/02/1965: Grant Daniel, retired, formerly Mendelson Frost, Johannesburg, Gauteng, SA.
04/02/1947: David Buckingham, retired, formerly Royal Adhesives, Pinetown, KZN, SA.
06/02/1964: Wouter Joubert, TFG Apparel Supply Co, Cape Town, W. Cape, SA.
06/02/1971: Carel Pretorius, Pep, Cape Town, W. Cape, SA.

In Memoriam this week

31/01/2016: Rudi Geyser (b. 11/03/1937), EVA Industries, Durban, KZN, SA.
02/02/2018: Sam Foster, retired, formerly Barker Footwear, Cape Town, W. Cape, SA.
02/02/2021: Bernhard Manock (b. 07/07/1933), Manock Naturals, Durban, KZN, SA.
03/02/1977: Ismail Adam Moosajee (b. 28/08/1927), Seltex, Johannesburg, Gauteng, 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

Looking to purchase good condition refurbished machinery for leather goods.

Job creation initiative involving local NPO.
Please contact Susan.
Cell No: 072 410 6683

Fairs & events updated last week

22-24 February: Lineapelle, Milan, Italy.
11-14 March: Homi Fashion & Jewels, Milan, Italy.
13-15 March: Micam, Milan, Italy.
13-15 March: Mipel, Milan, Italy.
13-15 March: TheOneMilano, Milan, Italy.

New publications to look out for this week

On Wednesday: S&V African Leather February edition - The campaign to ban the import of hunting trophies into the UK.
- Factors that affect the area yield of leather in a tannery.
- Making leather: The removal of unwanted materials and extension of the structure.
- Dealing with emergencies in a tannery.
- Maintaining leather supply chain integrity.

On Friday: S&V Footwear & Leather Goods February edition
- The innovators: Footwear and leather goods manufacturers who are doing things differently.
- Sportswear: The gap opens for middle tier brands.

Directory entries updated last week

African Stores, Heidelberg, Gauteng, SA.
EVA Industries, Durban, KZN, SA.
Kaytex Belts, Pretoria, Gauteng, SA.

New subscribers last week

Marius Slabberts, Hartbeespoort, N.W. Province, SA.
Ali Newaz, leather engineer, Green Speed Eye, Dhaka, Bangladesh.
Luz Medina Bonta, Tintoretta, artist/designer/traditional tannery, Olancho, Honduras.

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 (27 January 2022) - The current average hide price remained unchanged at R5.60/kg from a week ago. The current price is 2.5% higher than the average price a month ago and is 39.5% higher than the average price a year ago. The range of prices reported was as follows: Minimum price: R5.00 Maximum price: R5.80. Please note: 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.

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:
AOBA, Tongaat, KZN, SA. Fully moulded footwear manufacturer.
Gone Skiing, Johannesburg, Gauteng, SA. Skiing and snowboarding retailer.

Contact us

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

Next newsletter: January 31, 2022.

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

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