S&V Weekly Newsletter Vol.10 No.25, June 17 2024

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Footwear industry loses 1 of 2 women’s heel makers

Pinetown, KZN, SA – Repurpose Innovate, the ABS and styrene heel maker started by Frank Mellon after Valmell Components closed in March 2020, is now also closing.
      Mellon said he would complete existing orders, but would not take on any new business.
      “Prior to 1994, Valmell was making 22 000 pairs of heels a day,” he said. “When we closed, we were still making around 1 500 pairs a day, and when I moved here, to Westmead, I would have been able to run a sustainable business on 600 pairs. But we’re only making 150, and that is definitely NOT sustainable.”
      His main customer is Michelle Footwear, manufacturer of Froggie, and he said he was negotiating with MD Warren Gedye.
      At this point, he has not found a buyer for the injection moulding machines and the moulds. The only other ABS and styrene women’s heel manufacturer is John Whittle Components.

Small parcel duties: ‘It had become a problem for the Retail CTFL value chain’

Cape Town, W. Cape, SA – ‘The wheels of justice turn slowly,’ starts the commonly quoted wisdom about the legal system, and for SA retailers facing the avalanche of under-taxed goods from online Chinese retailers Temo and Shein, it has been an excruciatingly long wait.
      For them, the good news last Thursday was that come 01 July, the small parcels arriving at Johannesburg International, which have been attracting a flat 20% duty, will now be charged 45% duty PLUS 15% VAT – 60% in total.
      That duty apparently applies to all goods, so in the case of footwear, most categories of which attract a 30% duty when arriving in containers, the total tax on the Temo/Shein footwear will be 15% higher than normal imports.
      For clothing, the normal duty is 45%, so the new small parcel rate will match normal duties.
      “When you drive in a 60 km zone, the law offers some leeway,” said National Clothing Retail Federation of SA (NCRF) executive director Michael Lawrence, “but go over 65 and you get fined. That’s what happened here: What was a small gap in the market, and therefore ignored, had become a problem for Government and for the entire value chain, and had to be addressed. This isn’t new legislation, its vigorous application of existing legislation.”
      He said he was awaiting documentation on how the new system would work in practice.
      NCRF members – and all other retailers, manufacturers and importers – in fact the entire apparel industry – will be hoping the rest of the quote will come true also: “…but grind exceedingly fine.”

Tanning, footwear sectors in dispute over wages

Durban, KZN, SA – 2 of the 3 sectors in the National Bargaining Council of the Leather Industry of SA are in dispute over wage increases, new NBC general secretary Ilhaam Ryneveld confirmed over the weekend.
“The General Goods and Handbags Sector have concluded a 1-year agreement; Parties agreed to an increase in wages of 7% and Holiday Bonus shall be increased from 6 days’ pay to 7 days’ pay.
      “The parties in the Footwear Sector have not reached agreement as yet. The unions are considering the offer of settlement made by SAFLIA and will revert to the Bargaining Council by the 20th of June 2024.
      “The parties in the Tanning Sector have not reached settlement as yet and the parties have agreed to a follow-up meeting with the mediator scheduled for the 21st of June 2024.”

Joint media statement
Directorate for Priority Crime Investigation (HAWKS)
South African Revenue Service (SARS)
National Prosecuting Authority (NPA)

Customs fraud follow-up

Ladybrand, Free State – 7 of the 9 suspects who were on the wanted list of the Hawks, for a multi-million Rand worth of fraud have been apprehended. They were arrested by Serious Corruption Investigation detectives on 6 and 7 June 2024. The 4 females and 3 males are current and former employees of the South African Revenue Service (SARS), who were arrested in Limpopo, Gauteng, Free State,  and the Eastern Cape. The suspects appeared in the Ladybrand Magistrates Court on 10 June 2024, facing charges of fraud, money laundering, contravention of the Tax Administration Act 28 of 2011, contravention of the Customs and Excise Act 91 of 1964, and contravention of the Prevention of Organised Crime Act 121 of 1998. The arrest of 2 outstanding wanted suspects is imminent.
SARS confirms that 5 of these employees went through the disciplinary process and were found guilty and dismissed. 2 employees resigned, pending the disciplinary process. 1 employee who went through the same process was issued with a final written warning and the other 2 of the 9 are currently undergoing the disciplinary process.
It is alleged that the employees were stationed at Ficksburg Bridge, Maseru Bridge and Vanrooyenshek Bridge where they facilitated 333 transactions amounting to R653 500 455. All identified transactions were imported consignments/cargo (textile) in bond (Removal in Bond) from the Durban port of entry to be exported from the Free State Border Post (Maseru Bridge).
The Hawks, working together with the Anti-corruption Investigation unit of SARS, presented a watertight case before the National Prosecuting Authority (NPA). The NPA welcomes the arrests of the accused, and it envisages that these arrests will send a clear message to other perpetrators of corruption and fraud-related offences.

Mr Price final results March 2024

Durban, KZN, SA (Thursday 13 June 2024z, 7:16) – Revenue for the 52 weeks ended 30 March 2024 went up 15.5% to R37.9 billion (2023: R32.9 billion). Profit before finance costs and finance income grew 7.9% to R5.3 billion (2023: R4.9 billion). Profit attributable to equity holders of parent increased by 5.3% to R3.3 billion (2023: R3.1 billion). In addition, headline earnings per share increased by 6.7% to 1 286.2 cents per share (2023: 1 205.7 cents per share).

Group outlook
The South African economy contracted between January and March 2024 and consumer pressures continue. During this period, group retail sales increased 5.9%, higher than the market, with a resultant increase in market share of 60bps, thereby demonstrating the strength of the group's brands and its strategic positioning. External research has recognised that the group holds the highest brand equity and most loved brands in the apparel and homeware sectors in South Africa. Furthermore, the group was ranked the most valuable fashion apparel retailer in South Africa and Mr Price Apparel was voted the coolest clothing store.

The later arrival of winter this year has resulted in subdued trade in the first two months of FY2025. Despite this the group gained market share in April 2024 (latest available data) and sales growth recovered strongly in early June, driven by the onset of winter. Group retail sales in Q1 FY2025 to 11 June 2024 increased 4.4%, against sales growth in the base of 17.0%, at higher GP margins than the prior year.

Supply chain challenges in the form of port inefficiency and increasing shipping costs will add pressure in the short term. However, the acquisition of port equipment by Transnet which will take some time to become operational, is encouraging. In the forthcoming year the group will focus on its existing operations, raising customer service levels, and investing appropriately to ensure that their overall experience meets their expectations. Forecast capital expenditure for FY2025 is anticipated to be approximately R1.0bn and 200 new stores. Profitable market share gains and retaining strong operating and balance sheet metrics will be key outcomes.

Consumer relief in the latter half of the year is expected in the form of moderating inflation, decreasing interest rates, and a boost to discretionary spending with individuals being permitted to withdraw additional funds from their retirement savings. Further respite could result if the exchange rate improves, but this is dependent on the outcome of the government coalition talks pursuant to the South African general elections. A market friendly outcome has strong potential to elevate South Africa to a new growth path, making a significant impact in reducing unemployment and stimulating the economy.

Looking for women’s ‘Sunday church shoes’

Durban, KZN, SA – Victoria Mubaiwa, who helps women in her community is looking to buy as many pairs as she can get for her money.
She writes: “I am looking for women’s shoes that we can gift to elderly ladies in Mayville. Simple, beautiful black, 'Sunday church' shoes.
        “I have R5 000. So as many as I can get for that amount. Previously I bought from China Mall before it burned down.”
      I emailed her a photo of a black, synthetic upper court shoe on a low heel, and she said she was looking for shoes “similar to that”.
      If you have shoes to sell, please contact Victoria at magadi@live.co.za, and please cc me so I know there has been a response.

Retirement

Pinetown, KZN, SA – Shotland’s Packaging sales member Wendy Burger retired at the end of May. Business development manager Sherwin Nargan now heads sales.

In case you missed it!

The June issue of S&V African Leather Magazine

CLICK HERE TO VIEW IT ONLINE

S&V AFRICAN LEATHER MAGAZINE VOL18 No6 June 2024

IN THIS ISSUE:

02 Sam Setter’s ‘Pills’
- A new quip from Sam Setter in each issue.

04 Upfront
- NTE Company: More pressure to meet demand as flood knocks out Brazilian producer.
- Hüni and Dose announce global distribution and partnership agreement.

06 Leather, Its Image & Its Place In The World
- In the face of widespread attacks on leather, finding our industry voice is essential, writes the Sustainable Leather Foundation’s Deborah Taylor.

09 An Eclectic View
- Disintegration 2023: Composting is a key part of sustainability. Correspondent H. Procter reports on progress.

12 Decoding Tanning Science
- Acid swelling – how does it affect chrome tanning and the resultant leather. Dr Clive Jackson-Moss of the ISTT reviews a paper originally published in JALCA.

14 Weights & Measures
- Compiled by the ISTT.

15 Technology
- Automation and supervision of the leather making process: The present and future of leather processing technology, by Giulio Galiotto, Erretre.

17 Sustainability
- Chemical and physical recycling are essential for the realisation of the Green Deal and the circular economy – a paper by The Renewable Carbon Initiative.

18 Agriculture
- Department of Agriculture, Land Reform and Rural Development urges Eastern Cape farmers and livestock owners to take steps to curb the spread of foot and mouth disease.



Advertisers in this Issue
All China Leather Exhibition (ACLE) (05), Authenticae (03), International School of Tanning Technology (ISTT) (08), Mimosa (10), Rolfes Leather Division (OFC), S&V Calendar (01), S&V Directory (13), Southern African Footwear & Leather Export Council (SAFLEC) (11), Sustainable Leather Foundation (07).

They Said It

"You’re normally the FIRST person to call me about this sort of thing, but this week you’re the 18th – I was feeling a bit hurt." - Michael Lawrence, director of the National Clothing Retailers Federation of SA, on the decision to raise duties on online small parcels from Temo and Shein. I had nothing to say in my defence.

"If it's not biodegradable, it's not environmentally friendly. Recycling and repurposing and any other word is an illusion and a grand deception. My 5 cents’ worth." - Paul Theron, executive director, Apparel Manufacturers of SA, Durban, KZN, SA, on an article in the June edition of S&V African Leather.

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

Chante van den Berg, Business Development Manager, Incomati, Gauteng, South Africa
Urvashee Hemraj Poken, Owner, Rathgar Falls Trading (PTY) Ltd, KZN, South Africa
Johnny, General Manager, Falke Hosiery, Rosslyn, Pretoria, South Africa
Duan, Sales, Colourlock South Africa, Cape Town, South Africa

Birthdays this week

17/06/1973: Alfredo de Oliveira, Fashion Fever, Welkom, Free State, SA.
18/06/1933: Erich Debus, retired, formerly Richleigh Shoes [closed], Pietermaritzburg, KZN, SA.
18/06/1970: Karin Pieck, Shoes & Views.
19/06/1979: Sumen Naicker, Fusion Footwear, Springs, Gauteng, SA.
19/06/1969: Monica Frank, Labora Shoes, Durban, KZN, SA.
20/06/????: Patricia Khumalo, the DTI, Pretoria, Gauteng, SA.
21/06/1962: Carl Brinkmann, agent, Windhoek, Namibia.
21/06/1969: Du Toit Kruger, KKI, Oudtshoorn, W. Cape, SA.
22/06/1964: Collin Govender, Owen’s Press Knives, Durban, KZN, SA.

In memoriam this week

17/06/1994: Roy Inggs (b. 18/06/1932), Inggs Shoe Stores [closed], Roodepoort/Florida, Gauteng, SA.
17/06/2021: Cornelius 'Con' Barnard (b. 01/02/1934), Stanhope Boot & Shoe, Pinetown, KZN, SA.
19/06/2021: Hennie du Plessis (b. 06/01/1942), Strassberger Shoes, Clanwilliam, W. Cape, SA.
21/06/1992: Jonathan Greenblatt, Richleigh Shoes [closed], Johannesburg, Gauteng, SA.
22/06/2010: Boris Levin (b. 03/07/1935), footwear agent, Johannesburg, Gauteng, SA.
23/06/2016: Benjamin ‘Buzz’ Burke (b. 22/08/1949), Dolphin Components, Shoe Buzz [both closed], Cape Town, W. Cape, SA.
23/06/2016: Billy Moodley (b. 31/08/1956), BM Components, 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.

Directory entries updated this week

Brown Sugar [Ongeza Investments cc], Nelspruit, Mpumalanga, SA.

3. Malawian Kwacha (MWK) (buying)

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

4. Zambian Kwacha (ZMW) (buying)

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

5. Zimbabwe Dollar (ZWL$) (average) / Zimbabwe Gold (ZiG)

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

Note: For previous rates, see HERE

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (13 June 2024) - The average hide price decreased by 0.51% to 3.23/kg from R3.24/kg a week ago. The current price is 1.23% higher than the average price a month ago and 5.9% lower than the average price a year ago. The range of prices reported was as follows: Minimum price: R3.00 Maximum price: R3.25. Price movements will be highly influenced by developments in the status of our animal diseases. 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:

Surrey Group, Marondera, Zimbabwe. Agricultural group.
Surtee Group [The Power of Trading (Pty) Ltd], Sandton, Gauteng, SA. Luxury apparel retailer.

THIS WEEK LAST YEAR!

We reported on the Pride Backlash against Corporates

Drip announced the closure of its Kiddies Republic retail store

READ IT HERE - S&V WEEKLY NEWSLETTER VOL.9 NO.25, JUNE 19 2023

THIS WEEK FIVE YEARS AGO!!

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