S&V Weekly Newsletter Vol.10 No.13, March 25 2024

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Trading conditions

Douglas B. Bornman, member, Texstyles Import & Export cc
Johannesburg, Gauteng, SA – We mostly service the furniture manufacturing industry.
      The trading is very subdued, as can be expected for this time of the year (The impending elections don’t help matters either).
      The retail market is very quiet with a number of independent shops having closed down. With the high unemployment rate, it is not surprising.

Greg Bing, member, A.P. Jones cc
Cape Town, W. Cape, SA – We didn’t open on the public holiday, and we don’t open on Sundays, but we traded satisfactorily on the Wednesday and the Friday, and again today (Saturday). We’re between seasons at the moment, with both summer and winter stock, and it is also the Saturday that is furthest from the last pay day, but I’m not unhappy with the way we’re trading.
      Separately, we’re making headway into getting back to where we were pre-covid. We’ve installed solar panels and inverters, and doing the maintenance we couldn’t do during covid. So all quite positive.

Edgars Zimbabwe proposes moving from Zimbabwe Stock Exchange to Victoria Falls Stock Exchange for closer links to US Dollar

T.N. Sibanda, Chairman of the Board of Directors
Bulawayo, Zimbabwe (01 March 2024) – As we navigate the dynamic landscape of the business environment, I would like to bring to your attention some pivotal developments that warrant careful consideration for the future of Edgars Stores Limited. Historically, the Edgars business has heavily relied on ZWL transactions; however, recent times have witnessed a notable surge in foreign currency transactions, a trend mirrored across the broader economy. Moreover, the Government's extension of the multi-currency regime until 2030 underscores the growing necessity for USD capital within our Company.
The performance of Edgars in the past year has been subject to exchange rate volatility and market liquidity fluctuations in both ZWL and foreign currency. However, management remains optimistic, steering the business towards expanding its physical and online presence, coupled with strategic merchandise procurement initiatives reliant on USD access. Consequently, the Board has proactively explored various avenues to secure access to USD to drive the business. Our commitment to this pursuit continues as we explore options to fortify the business's access to USD capital and consider migrating to USD reporting, ultimately enhancing sustainability and Shareholder value.
To bolster our growth momentum and safeguard Shareholder value, the Board is proposing the migration of the Company's share capital from the Zimbabwe Stock Exchange to the Victoria Falls Stock Exchange. This strategic move is anticipated to unlock several advantages, including:

• Access to USD Capital for expansion initiatives, driving business performance, and ultimately enhancing Company and Shareholder value.
• The enabling of free dividend and share disposal proceeds repatriation to foreign Shareholders.
• Favourable tax incentives, including zero capital gains tax and a 5% withholding tax for foreign investors, thereby boosting Shareholder returns.
• Reporting financial performance in USD providing stability and mitigating complexity associated with hyperinflation adjusted ZWL reporting.
• Minimised exchange risk for Shareholders due to local currency depreciation by providing an accurate USD-based benchmark of the Company's value.
• Mandated USD dividends and the receipt of USD as compared to ZWL on share liquidation, enabling the Shareholders to receive the true value of their holdings.
• Lower trading costs of 2.31% compared to 4.63% on the ZSE which enable the Shareholders to retain more of their value when they exit or enter their trading positions.

In light of these compelling reasons, the Board supports the migration of Edgars from the ZSE to the VFEX. This move aligns with our commitment to fostering sustained growth, maximizing Shareholder value, and positioning the Company for success in an evolving economic landscape. https://www.edgars.co.zw/articles/2024/03/01/edgars-circular-to-shareholders

Nike is leaning back into wholesale. Some analysts say this was inevitable.

Analysts say Nike missed out on some crucial distribution channels by mainly focusing on DTC sales.

https://footwearnews.com/

Shoshy Ciment

22 March 2024 12:33 PM

After years of relentlessly focusing on direct-to-consumer sales, Nike is doubling back down on wholesale, a move some analysts say was bound to happen.
      The wholesale emphasis — one of few key areas Nike is looking to improve — marks an interesting reversal from Nike’s DTC-focused strategy (“Consumer Direct Acceleration” CDA) that has been the brand’s North Star since June 2020. This plan involved zeroing in on DTC and digital channels and pulling out of some wholesale doors. In recent months, market watchers become increasingly sceptical of Nike’s progress with this plan, as the Swoosh re-entered or reinvigorated its wholesale partnerships with retailers such as DSW, Macy’s and Foot Locker.
      In a Thursday call with investors, Nike president and chief executive officer John Donahoe said that while CDA “has driven growth and direct connections with consumers, it’s been clear that we need to make some important adjustments.”
      “While Nike Direct will continue to play a critical role, we must lean in with our wholesale partners to elevate our brand and grow the total marketplace,” Donahoe added.
      Nike’s wholesale emphasis has already impacted the footwear retail marketplace. In the last month, several retailers made it a point to call out the Swoosh as one of their top brand partners during earnings calls with analysts. On Thursday, Designer Brands Inc. said Nike sales have almost returned to pre-Covid levels at DSW since the brand was reintroduced to the chain in September. Academy Sports and Outdoors also called out Nike as largest brand in its footwear business.
      In the third quarter, Nike’s wholesale revenues were up 3 percent to $6.6 billion. Nike Direct revenues were slightly up to $5.4 billion, with Nike Brand Digital sales down 3 percent on a reported basis and 4 percent on a currency-neutral basis.
      According to some analysts, the reversal back to wholesale was a long time coming.
      “The decision to sacrifice their wholesale partners to drive greater digital business has created some issues for Nike, particularly on the competitive side,” wrote Wedbush analysts Tom Nikic in a note earlier this week.
      These issues, he said, have been especially prevalent in the running category, a “highly wholesale-dependent” category that Nike had largely neglected until Covid. Nike’s absence in this channel has largely contributed to its lagging performance behind fast-growing brands in this category, such as Hoka and On.
      Nike’s DTC focus also caused it to miss out on a large swath of shoppers looking to buy shoes in stores after the pandemic.
      “Customers want to buy Nike everywhere so reducing wholesale dramatically seems like the wrong move in hindsight,” wrote Jefferies analyst Randal J. Konik in a Thursday note. “Now the company is left trying to figure out what the optimal mix between direct and wholesale should be, and we won’t find that answer until an analyst day later this year.”
      Nike chief financial officer Matthew Friend addressed this need to show up in various places in the Thursday call with analysts.
      “The consumer is still clearly shopping in multi-brand retail, and we need to elevate our brand and our positioning to be able to serve the consumer and to have the maximum impact from the new innovations that we’re bringing to market,” he said.
      Williams Trading analyst Sam Poser has previously maintained that Nike’s direct business alone was not sustainable without wholesale. Now, he says the recent wholesale push represents a desire from Nike to get more product in the marketplace at the potential expense of brand equity, something he sees as a likely possibility.
“While Nike product, in total, is not as in demand as once was, Nike remains the largest athletic brand, and can use its leverage, and is using its leverage, with its wholesale partners,” Poser wrote in a Thursday note. “Using leverage is great if the product sells well, but is brand dilutive if the product does not perform.”

Death notice

Pinetown, KZN, SA – Craig Garvie, CEO of African Boomerang Holdings, died on 18 March 2024, aged 55. ABH, which included North Safety/4tify Africa, Cape Coaters and Fibremill SA, is in liquidation, but has been engaged in legal proceedings to try to have some or all of the divisions moved to business rescue..

In case you missed it!

The latest issue of S&V Protect Magazine

CLICK HERE TO VIEW IT ONLINE

S&V PROTECT MAGAZINE VOL18 NO1 FIRST QUARTER 2024

IN THIS ISSUE:

03 Upfront
- Beyond the lens: How Vision AI is transforming PPE usage and monitoring.
- Workwear: There’s no such thing as bad publicity, the saying goes, and the decision by women’s workwear brand Reformation to choose Monica Lewinsky as the face of its ‘You’ve got the power’ voter awareness campaign proves it.

07 OHS in Focus
- Occupational Health & Safety in procurement: PPE is not just about price, advises Leighton Bennett, Benrisk Consulting, Johannesburg, Gauteng, SA. The key is having all the information to be able to make the correct decision. OHS and procurement staff must work together.

12 Academia
- Construction 5.0: Towards a collaborative and people-centred industry. Instead of replacing people, technological advances will lead to re- and upskilling them, writes Professor John Smallwood.

13 Innovation
- Fraunhofer-Gesellschaft: Innovations in poultry farming: UV disinfection instead of antibiotics.
- Fraunhofer-Gesellschaft: Targeted pest control with RNA spray.

15 Notice Board
- Association of Construction Health and Safety Management appoints 2 new directors.

16 Buyers' Guide
- What's on offer.

Advertisers in this Issue
Hi-Tec Interceptor (OFC), Kaliber (02), Palm Footwear/Terrapod (OFC), Rainbow Group (10), Rebel SafetyGear (04), S&V Calendar (01), S&V Directory (05), SAFLEC (09), Timberland/Keystone Trading (06).

They Said It

"My wife is an editor and publisher and is doing a quick edit you will have it shortly. She is also a partner in my business … the only reason I am in charge is because she says I can be." - Cliff Coombe, Agent-C, George, W. Cape, SA, referring to his wife, Tracey, who sent a contribution for last week’s newsletter. A point they made is that it’s helpful to have “a mixed basket” as agents, and a look at their website, https://aardvarkpress.co.za/, shows they’re a very busy couple.

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

New subscribers last week

Yusuf, Owner, Come duze store, Gauteng, South Africa

Birthdays this week

25/03/1963: Richard Mulenga, Zamleather, Lusaka, Zambia.
25/03/1974: Charl du Plessis, left the industry, formerly with KKI, Oudtshoorn, W. Cape, SA.
26/03/1950: Bunny Ramsay, Equalization Footwear, Durban, KZN, SA.
26/03/1961: Peter Meinzer, Thiel’s Shoe Shop, Windhoek, Namibia.
27/03/1952: Mike Conradie, freelance designer, Durban, KZN, SA.
27/03/1958: Bède Bedetse, African Tannery Company (Afritan), Bujumbura, Burundi.
27/03/1958: Tony Parkes, retired, formerly Bata SA, Pinetown, KZN, SA.
27/03/1992: Eugene Greyling, Soviet, Midrand, Gauteng, SA.
28/03/1963: Brett Momberg, BBF Group, Port Elizabeth, E. Cape, SA.
28/03/1964: Pooan Archary, Paragon Footwear, Pietermaritzburg, KZN, SA.
28/03/1968: Ismail Gathoo, Esquire, Bethlehem, Free State, SA.
28/07/1970: Ansa Nel, African Leather & Skins, Centurion, Gauteng, SA.
28/03/1972: Alfonso Smerilli, Make My Shoes, Johannesburg, Gauteng, SA.
28/03/1985: Taariq Mahomed Hoosen, Paris Belts, Johannesburg, Gauteng, SA.
28/03/1986: Mohamed Adam, Seadoone Shoes, Amanzimtoti, KZN, SA.
29/03/1949: Jose Alves, Unikem, Pinetown, KZN, SA.
29/03/1954: Keith Alexander?
29/03/1955: Dennis Manning, emigrated, formerly Trenzado Footwear, Durban, SA.
29/03/1963: Kosi Cooppan, Majenta Shoes, Durban, KZN, SA.
29/03/1974: Julian Zuluaga, left SA, formerly Bata SA, Pinetown, KZN, SA.
30/03/1946: Sarel Broodryk, retired, formerly Exotan, Port Elizabeth, E. Cape, SA.
31/03/1950: Herbert Schier, African Leather, Swakopmund, Namibia.
31/03/1960: Gill Barnett, Urban Angel Accessories, Boksburg, Gauteng, SA.
31/03/1966: Lars Torpus, ?, formerly Nakara, Windhoek, Namibia.
31/03/1975: Imraam Essop, Baby Luv, Springs, Gauteng, SA.

In memoriam this week

26/03/1994: Manfred Hanni, Hanni Leathers [now Pangea SA], Nigel, Gauteng, SA.
26/03/2002: Marie Joy Viljoen, Tuftex, Pinetown, KZN, SA.
26/03/2011: Paolo Bresolin (b. 25/07/1944), Andreoli Shoes, Pinetown, KZN, SA.
26/03/2016: Viroo Harry (b. 10/01/1960), Mr Man, now part of Knight's Shoes, Grahamstown, E. Cape, SA.
28/03/2011: Brian Berger (b. 25/12/1963), Armadillo Footwear, Johannesburg, KZN, SA.
28/03/2015: Colin Grecia (b. 29/12/1964), Classic Components, Pinetown, KZN, SA.
29/03/2008: Jeff Bub (b. 28/09/1942), In Shoes/In Clothing [closed], Cape Town, W. Cape, SA.
31/03/2016: Peter Edmeades (b. 19/07/1950), Rebel Safety Gear, Germiston, 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.

Directory entries updated this week

BEC Sales cc, Cape Town, W. Cape, SA.
Bruce Harrower Agencies, Johannesburg, Gauteng, SA.
Fashion World [Judy’s Pride (Pty) Ltd], Pretoria, Gauteng, SA.
FrontierCo., George, W. Cape, SA.
Jozi Footwear [Shu Concepts cc], Johannesburg, Gauteng, SA.
Mr Price Apparel [Division of Mr Price Group], Durban, KZN, SA.
Mr Price Sport [Division of Mr Price Group], Durban, KZN, SA.
Power Fashion [Division of Mr Price Group], Durban, KZN, SA.

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 (22 March 2024) - The average hide price decreased by 0.09% to R3.281/kg from R3.284/kg a week ago. The current price is 0.31% lower than the average price a month ago and 13.7% 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:

Stranger, Lagos, Nigeria. Concept boutique.
Strassberger Skoene, Clanwilliam, W. Cape, SA. Footwear manufacturer.

Contact us

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

Next newsletter: April 1, 2024. Ad and editorial deadline Friday 29 March.

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

Our website www.svmag.co.za