S&V Weekly Newsletter Vol.10 No.07, February 12 2024

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The article below, which appeared in Footwear News on Friday, seemed appropriate following the liquidation application against black-owned South African sneaker retailer Drip, reported last week.

How black shoe store owners are carving their own paths in an already challenging business

By Shoshy Ciment

09 February 2024 12:34 PM – “If I had to go back again, I don’t know if I would necessarily take the same risk,” said Jennifer Ford, owner of Premium Goods in Houston.
      Like every independent entrepreneur, Ford has navigated dramatic shifts in retail and persevered through economic ups and downs since she opened her Houston sneaker mecca two decades ago at the age of 26.
        Today, Premium Goods is still a rarity in the shoe boutique world, where few Black women store-owners have attained long-term success.
      And these days, it’s become harder and harder to open a shoe store — no matter who you are.
      “Not a lot of people are just jumping in,” explained Mark Denkler, president of the National Shoe Retailers Association. “I’ve been in this position for three years. And unfortunately, I’ve gotten more calls [from people] asking how to sell their store versus how to open one.”
        These barriers to entering the shoe store retail game are manifold. They include the need for significant financial capital, business experience and relationships with brand accounts, to name a few.
        “I think the biggest challenge is securing the right accounts from brands and a line of credit,” said Dr. D’Wayne Edwards, the founder of Pensole Lewis College of Business & Design and cofounder of the Black Footwear Forum.
      Black-owned businesses, specifically, have faced uphill battles in recent years amid the economic challenges during the pandemic. A report from the Federal Reserve Bank of New York found that Black-owned businesses were twice as likely to shutter during the pandemic compared with companies overall — due to weaker relationships with banks, a lack of pre-existing funds and a lack of a strong financial cushion, all of which were exacerbated by the pandemic.
      “As minorities, we don’t have access to [funding] as much and it’s not given to us as much. And if it is, it comes with a big ball and chain that holds you back,” Ford said.
        Bruce Wesley, owner of Wesley’s Shoes in Chicago, which prides itself as being the oldest African American-owned shoe store still running in the U.S., took over his family shoe business, founded in 1970, from his father.
         “It’s definitely helpful if you can lay down the [business] foundation and people follow the footprints,” he explained. “There are a lot of people that have been very successful at it, that’s why they are second and third generation now.”

The power of the franchise model
        In 2021, The Athlete’s Foot recognized that it could play a major role in helping Black entrepreneurs chart a path for success at a critical time.
        The retailer launched the Strategic African American Retail Track (StAART), which equips would-be business owners with the tools to start their own Athlete’s Foot franchisee. Tasha Cobbs Leonard, a Grammy Award-winning gospel artist and businesswoman, became the first-ever beneficiary of the StAART program and one of the few Black female sneaker retail store owners when she opened her TAF location in Greenville, S.C. last year.
      “This gives me a chance to be an inspiration to people … especially young girls who have a desire to have companies or businesses of their own,” Cobbs Leonard, who also owns her own eyewear brand and previously launched a plus-sized women’s brand, told FN in an interview last year.
      This model is one example of how a franchise system can be a way to mentor diverse talent.
        “Franchising is a way to get involved in a brand that’s well established and have a playbook to get you started in an industry that you may or may not be that familiar with,” said John Prothro, president and CEO of retail chain Foot Solutions, Inc.
      Foot Solutions, which sells orthotics and specialist footwear, operates a robust franchise model that offers participants “intensive initial and ongoing training as well as operational and marketing support,” according to its website. Of the chain’s more than 50 stores in North America, six are non-franchised stores, Prothro said, explaining how a franchise model offers new store owners the name recognition and established resources of a large retail chain.
      In Ford’s case, she borrowed the name of an existing boutique store to get her own business off the ground in 2004. Her good friend Clarence Nathan founded his New York City based Premium Goods store in 2002 and encouraged Ford to use the same name for her store to help her get established and leverage existing relationships with vendors. Despite the shared name, both stores operate completely independently.
      “At that time, it was more of a cool guy scene [determining] who was getting the really good products and who was really getting taken care of,” Nathan said regarding the challenges of setting up accounts with popular brands. “It wasn’t just about the story you were telling. So to help try to tip the scale in our favor, [I thought] ‘Hey, we’ll just have more stores.”

Education
      Grant and mentorship programs can also be a powerful tool for empowering minorities to succeed in their footwear business. For example, The Running Industry Diversity Coalition (RIDC) in January rolled out a new $200,000 grant program to support running retail ownership among Black, Indigenous and people of color (BIPOC) entrepreneurs. The grant recipient will be provided a “care team” for one year that includes a retail store owner or owners and a lawyer, as well as other Black and brown leaders.
      Premium Goods’ Ford lauded the free education resources she received when growing her business as well. She participated in the Goldman Sachs 10,000 Small Businesses program, a mentorship and education program that helps entrepreneurs grow their businesses, and did a similar program for minority women run by Bank of America, both of which she said were instrumental in taking her business to the next level.
      But beyond education, capital and connections, being in the footwear retail business requires a certain level of tenacity and grit.
      “It has to be something that minorities want to really be a part of, and really make the effort and grow into the business,” said Nathan. “It’s not just, ‘Hey, I want to get cool kicks and that kind of stuff. It’s a lot of work.”

VF Corporation admits ‘disappointing’ results as revenue drops 16%

Extracts from VF Corporation Reports Third Quarter Fiscal 2024 Results and Announces Strategic Portfolio Review: Report

Denver, Colorado, USA (06 February 2024 4.05pm) - VF Corporation reported financial results for its third quarter (Q3'FY24) ended December 30, 2023, announcing a quarterly per share dividend of $0.09 and reiterating FY24 free cash flow guidance.
      Bracken Darrell, President and CEO, said: "Our third quarter top-line performance was disappointing. However, we are confident the actions we are implementing as part of Reinvent will enable VF to stabilize and then grow revenue and improve operational performance across brands and regions. We have already begun to see the impact of our efforts to right-size the company’s cost structure and improve its inventory position, resulting in stronger than expected cash flow and expanded gross margin in the quarter. This quarter marked the beginning of the next phase of our transformation plan: resetting the marketplace for Vans, reviewing our brand portfolio and continuing to build the organization of the future. As we approach the end of this fiscal year, my confidence in VF’s future is rising."

Q3'FY24 Financial and Operating Highlights
* Revenue down 16% (down 17% in constant dollars) to $3.0 billion (The quarter was negatively impacted by a shift in timing of wholesale deliveries, which was most pronounced for The North Face and the EMEA region)
* Loss per share $(0.11) versus Q3'FY23 earnings per share $1.31; adjusted earnings per share $0.57 versus Q3'FY23 adjusted earnings per share $1.12
* The North Face down 10% (down 11% in constant dollars); in the first nine months of FY'24 revenue is up 4% (up 3% in constant dollars)
* Americas region down 24% (down 25% in constant dollars)
* International business down 5% (down 8% in constant dollars). APAC region up 2% (up 3% in constant dollars), including Greater China up 5% (up 7% in constant dollars). EMEA region revenue down 7% (down 12% in constant dollars)
* Inventories at the end of Q3'FY24 down 17% relative to last year
* Net debt at the end of Q3'FY24 reduced by approximately $640 million relative to last year

During the quarter, the company continued to execute the Reinvent transformation program, which aims to enhance focus on brand-building and to improve operating performance. The initial four priorities of Reinvent are to improve North America results, deliver the Vans turnaround, reduce costs and strengthen the balance sheet. The company will continue to pursue opportunities to simplify and streamline its processes and invest in the business to drive brand heat and accelerate a return to growth.
      Consistent with the goals of Reinvent, VF has initiated an in-depth strategic review of the brand assets within the portfolio, in alignment with the Board of Directors, to ensure the company owns the brands that it believes create the greatest long-term value.

They Said It

"I confess sometimes I lose track!" - Deborah Taylor, MD of the Sustainable Leather Foundation, and a regular contributor to S&V African Leather, on her hectic travel schedule – which includes a visit to Harare, Zimbabwe, today and tomorrow.

"I closed my factory October last year. Retired now do long term camping in Margate." - Frik Janse van Rensburg, formerly Game Skin & Leather Tanning, Brits, N.W. Province, SA.

New subscribers last week

Shermen, Entrepenuer, Europcar, Johannesburg, Gauteng, South Africa
Warren Pechey, Director, Santon Workwear, Durban, KZN, South Africa
Lesley Johnston, General Manager, Thandana Bag Co, Mount Edgecombe, KZN, South Africa

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

Birthdays this week

12/02/1951: Jack Bassage, Myganox, Pietermaritzburg, KZN, SA.
12/02/1961: Jon Robb, Neptun Boot, Pinetown, KZN, SA.
12/02/1968: Pino di Lembo, SA Crocodile & Exotic Skins Agencies, Johannesburg, Gauteng, SA.
12/02/1968: Sean Hadnum, Chillisource, UK.
12/02/1981: Joelene Chetty, Arena Trims, Pinetown, KZN, SA.
13/02/1950: Rowan Allison, Midland Leather, Pinetown, ZN, SA.
13/02/1950: Dhiraj Dajee, Avalon Job Buyers, Cape Town, W. Cape, SA.
13/02/1964: Jean-Marc Tostee, agent, Durban, KZN, SA.
13/02/1975: Naeem Sonpra, Sonpra Bros, Polokwane/Pietersburg, Limpopo, SA.
13/02/1977: Steven Eckstein, emigrated, formerly Sports Action, Durban, KZN, SA.
14/02/1951: Maryse de Ranero, Great Brak River, W. Cape, SA.
14/02/1975: Alita Scholtz, All Protection Safety, Vanderbijlpark, Gauteng, SA.
14/02/????: Janine du Preez, freelance consultant, Cape Town, W. Cape, SA.
15/02/1948: Rajin Sheodin, Ace Components, Pinetown, KZN, SA.
15/02/1957: Ashraf (Baboo) Kader, Kaytex Belts, Pretoria, Gauteng, SA.
15/02/1965: Sanjay Nana, Navada Clothing, Johannesburg, Gauteng, SA.
16/02/1955: Hennie Roets, BKB, Port Elizabeth, E. Cape, SA.
16/02/1966: Lorraine Jackson, agent, Johannesburg, Gauteng, SA.
16/02/1987: Mohamed Hoosen, Winners, Klerksdorp, N.W. Province, SA.
17/02/1950: Ian McDonald, retired, formerly Speciality Threads [closed], Amanzimtoti, KZN, SA.
17/02/1960: Raju Dhaya, VJ’s Superstore, Humansdorp, E. Cape, SA.
17/02/1966: Anton Sprake, agent, Windhoek, Namibia.
17/02/1971: John Harman, formerly Bata SA, Pinetown, KZN, SA.
17/02/1980: Desmond Sutherland Jnr., Aviocean Natal, Durban, KZN, SA.
18/02/1942: George Naicker, formerly Edcon, Johannesburg, Gauteng, SA.
18/02/1944: Colin Marx, retired, formerly Tropelli [closed], Pinetown, KZN, SA.
18/02/1956: Kevin Thompson, Leatherite International, Pr etoria, Gauteng, SA.
18/02/1957: Desmond Sutherland Snr., Aviocean (Natal), Durban, KZN, SA.
18/02/1977: Zahir Kader, Kaytex Belts, Pretoria, Gauteng, SA.

In memoriam this week

14/02/2004: Brian Matkovich (b. 06/02/1941), Futura Footwear, Pinetown, KZN, SA.
17/02/2011: Basil Benjamin (b.27/08/1929), agent, Johannesburg, Gauteng, SA.
18/02/2017: Harry Adams, (b. 24/02/xx), Finlam Textiles, 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.

Directory entries updated this week

Karan Beef (Pty) Ltd, Johannesburg, Gauteng, SA.
Karan Beef Farming (Pty) Ltd, Heidelberg, Gauteng, SA.
The Industrial Clothing Co. (Pty) Ltd, Edenvale, Gauteng, SA.
Tops Exotic Leather Tannery [Topsoil General Dealers], Kafue, Zambia.

3. Malawian Kwacha (MWK)

Source: https://www.rbm.mw/

4. Zambian Kwacha (ZMW)

Source: https://www.boz.zm/

5. Zimbabwean Dollar (ZWL$)

Source: Source: https://www.rbz.co.zw/

Note: For previous rates, see HERE

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (08 February 2024) - The average hide price increased by 0.30% to R3.284/kg from R3.283/kg in the previous week. The current price is 0.16% lower than the average price a month ago and 21.4% lower than the average price a year ago. The range of prices reported was as follows: Minimum price: R3.25 Maximum price: R3.50. 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, and Zama Sangweni, 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:

Horse Etc., George, W. Cape, SA. Tack shop.
Standfast Shoes, Accra, Ghana. Footwear manufacturer.

Contact us

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

Next newsletter: February 19, 2024. Ad and editorial deadline Friday 16 February.

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

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