S&V Weekly Newsletter Vol.10 No.41, October 07 2024

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Divine reopens CMT unit destroyed by fire

Pietermaritzburg, KZN, SA - CMT upper manufacturer Divine Shoes has reopened its unit which produces school shoe uppers for Bata SA, 6 weeks after a fire which destroyed it and several neighbouring businesses in Manchester Rd in August.
     Proprietor Nellan Pillay said he had rented a building in the Eddels Shoes premises.
     “We have had wonderful support from Bata and from other manufacturers who have loaned us equipment,” he said.
     Divine’s other unit, which makes uppers for BBF Safety Footwear, was unaffected by the fire.

From cow to shoe to customer: An invitation to anyone in footwear who wants and needs to know more about any aspect of the industry that puts food on their table

The topic of this week’s FREE Teams meeting: "The importance of being able to accurately calculate footwear production costs, and the consequent benefits". 

By Richard Kushlick, Footwear Education & Training

In 2007, I was fortunate to work with the Ecco footwear company and was enthralled by the manner in which a mega-sized international footwear business mastered the concept of vertical integration, and all the benefits therein.
It’s a complex set of ingredients, as one needs to ensure your business has an interest in every stage. One must own / part-own / have direct control of the component suppliers, R&D, design studios, factories, marketing arms, distribution hubs and retail stores. Clearly this is easier said than done, or many other footwear businesses would do the same. The pledge to remain privately owned has remained in the family since inception in 1963, when Karl Toosbuy, a German shoemaker, moved to Denmark, and set-up in the small town of Bredebro, on the Jutland peninsula. This remains the site of the head office, and the primary production facility is nearby in the town of Tonder.
The countryside is lush, green and flat…ideal for cattle farming. Toosbuy, who was a young, entrepreneurial shoemaker with no capital, and who had a dream of running his own business, saw this as the ideal place to start. Quality cattle meant quality hides. His search for capital wouldn’t come from Germany, as the economy was in recession and loans for startup businesses weren’t forthcoming. I was told by members of the management team that he approached local municipalities with a plan was to build a modern footwear production facility and tannery in the district. He would employ local labour and buy hides from the local abattoirs. He would educate the local employees in the art of shoe design, shoe making and leather tanning, thus creating a local niche micro-economy with finance / loans from the residents, via an agreement with local authorities. The deal was concluded and the Ecco dream was born. The most accepted translation or meaning of the Italian word “Ecco” is “Here I am” …a fitting term when one sees the superb collections Ecco produces every season.
In 2023, Ecco had a nett revenue of approx. €2 billion, making it one of the 20 biggest footwear businesses in the world. The secret to the Ecco success is multifaceted, of which the following are key ingredients.
• A tried and tested construction technology (direct injection PU), used for most Ecco collections. While this process is used by many other manufacturers, Ecco has developed a near perfect PU combination of cushioning and shock absorption, while reducing the possibility of ageing PU, hydrolysation or hydrolysis.
• The ability to produce the finest leathers. This is achieved by being able to adapt and comply with the growing sustainability regulations with special reference to tannery effluents and environmental protection laws. Ecco are renowned for their premium quality calf leathers, particularly white calfskin.
• Footwear that is aesthetically pleasing, functionally sound, an anatomically exceptional fit, outstanding stability, excellent shock absorption, and optimal pricing.
• An experienced, hands-on management group, backed by innovative R&D and design teams, ensuring a regular flow of new exciting designs, within the categories of expertise and market dominance.
• Consistent profitability, via the vertically integrated, low cost and flexible business principles…namely “from source to retail”.
• Being able to adapt and stay abreast of the exponentially demanding business, technology and consumer requirements.
When conducting footwear education programmes, I use the Ecco example of how to define a successful footwear enterprise, even though I have worked with other equally prestigious brands. The reason is specifically because Ecco is considered an all-rounder, where there is almost no reliance on third party service providers. It’s a great recipe if one has the required level of expertise in every department.
I have recently been collaborating with a well-known international footwear specialist, who operates under the pseudonym of “The Shoedog” through “Shoemakers Academy”. Our intention is to encourage footwear manufacturers, designers, distributors, marketers, retailers and social media fundis, to focus on areas of the footwear business which they would like to improve on. For example, a shoe designer may not have sufficient understanding of the biomechanics, anatomy and conditions of the foot; or a retailer would like to gain additional knowledge of the costs of producing footwear in China; or a factory manager is required to provide technical information in comparison to consumer foot data, from a specific region…this list of requirements is endless.
Once a month, we will have an online discussion (30 minutes), on one of the many aspects of the footwear business, and encourage all S&V members to join in live on Teams / Zoom. Podcasts will also be available. There are no costs to S&V members. Look out for our adverts in upcoming editions of S&V.

This is the link for S&V readers to join our discussion scheduled for 18h00 on the 10th of October –
https://teams.microsoft.com/l/meetup-join/19%3ameeting_ODY2ODQ0OTYtNDhhYy00ZTA0LTgxNzQtNjRkYjNkZTIxZTQ0%40thread.v2/0?context=%7b%22Tid%22%3a%22e1c5445c-a5a3-4c51-adb0-61c23813d53e%22%2c%22Oid%22%3a%229bdce810-beda-4788-9321-aad85851f3b2%22%7d

Nike reports mixed results for Q1, postpones investor day

Footwear News, 01 October 2024
br> Nike offered mixed results in its first earnings call since announcing that its CEO John Donahoe would step down and be replaced by Elliott Hill.
In addition to announcing results for the first quarter, the athletic giant said it would postpone its widely anticipated Investor Day, which was scheduled for Nov. 19, 2024. A new date has not yet been released. The company also withdrew its guidance for fiscal year 2025.
Shares of Nike were down more than 6.5% in after-hours trading on Tuesday.
For the first quarter, Nike reported that revenues were down 10% to $11.59 billion over the same quarter last year, short of the $11.65 billion expected by analysts surveyed by Yahoo Finance. Net income was down 28% to $1.1 billion and diluted earnings per share was 70 cents, which represented a 26% decline. This was ahead of the 52 cents expected by analysts.
Nike chief financial officer Matthew Friend said in a statement that Nike’s Q1 results “largely met” expectations and that there are already signs for future recovery.
“A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation,” Friend said. “Our teams are energized as Elliott Hill returns to lead Nike’s next stage of growth.”
Despite a generally positive reaction to the CEO news, analysts have broadly taken a conservative view of the stock, pointing out that big picture challenges persist for Nike. Some suggested in the last few weeks that Nike could further cut its guidance for the 2025 fiscal year as it implements a long-term turnaround plan.
Given the CEO shift, Nike withdrew its guidance for the year and will provide quarterly guidance throughout 2025, Friend said in a call with analysts. This approach is mean to help Hill embed in the company and determine how to reposition the brand for 2026. In June, Nike cut its fiscal year 2025 guidance and said it expected revenues for the year to be down in the mid-single digits, with revenues for the first half of the year down in the high single digits.
Though Nike declined to give specific guidance for the year, Friend said that the brand’s revenue expectations have “moderated” due to digital and retail sales trends. Q2 revenues are expected to be down between 8 and 10%.
By brand, Nike brand revenues were down 10% to $11.1 billion in Q1, driven by declines across all geographies. Converse brand sales declined 15 % to $501 million. By channel, Nike direct revenues were down 13% to $4.7 billion. Wholesale was down 8% to $6.4 billion.

They Said It

"t’s all Greek to me – and I’m Portuguese!" - Jose Rodriques, Master Movers (Pty) Ltd, Johannesburg, Gauteng, SA, complaining about trying to use the S&V Online Directory. I’m working on a solution for you, Jose. It will be available shortly, and will be announced in the Newsletter.

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

MP Nieuwoudt, Owner, PNS AIRCONDITIONG & REFRIGERATION T/A IN HOUSE, Phalaborwa, South Africa

Birthdays this week

07/10/1969: Gunnar Halbich, Paul Moeller & Co, Cape Town, W. Cape, SA.
07/10/1964: Jaco van Eeden, Nakara, Windhoek, Namibia.
08/10/1954: Dionne Prinsloo, Allied Agencies, Westville, KZN, SA.
08/10/1943: Willie van Vuuren, Fergom (SA), Southport, KZN, SA.
08/10/1973: Robert O'Connell, Bader SA, Pretoria, Gauteng, SA.
09/10/1946: Yunus Nagdee, agent, Johannesburg, Gauteng, SA.
09/10/1948: Ibrahim Shaikh, Hopewell Footwear, Durban, KZN, SA.
09/10/1957: RE Badenhorst, Vrystaat Huide & Velle, Kroonstad, Free State, SA.
09/10/1961: Richard Kushlick, Footwear Education & Training, Johannesburg, Gauteng, SA.
09/10/1971: Phoenix Wang, San Chang Import & Export, Estcourt, KZN, SA.
09/10/1992: Shane Bhima, KRB Safety & Packaging, Midrand, Gauteng, SA.
10/10/1943: Jamloot Bhagwandeen, retired, formerly Dick Whittington Shoes, Pietermaritzburg, KZN, SA.
10/10/1951: Paul Muir, Pasacojo Marketing, Cape Town, W. Cape, SA.
10/10/1968: Luke Barrett-Smith, Puma SA, Cape Town, W. Cape, SA.
10/10/1969: Nicole Benders, Prime Leathers, Pinetown, KZN, SA.
10/10/1971: Ismail Ebrahim, Jumbo Footwear, Pietermaritzburg, KZN, SA.
11/10/1956: Anita van Wyk, Shoe 4 U, Hartswater, N. Cape, SA.
12/10/1946: Siva Pillay, Verora Paints, Chatsworth, Durban, KZN, SA.
12/10/1960: Sam Wu, emigrated, formerly Footech, Ladysmith, KZN, SA.
12/10/1962: Ronell Fromke, Super Shoes, Windhoek, Namibia.
12/10/1966: AM ‘Buddy’ Seedat, Jino’s Clothing, Johannesburg, Gauteng, SA.
12/10/1972: Nagesh Pillai, formerly Gravel Road (closed), Chatsworth, Durban, SA.

In memoriam this week

08/10/2011: Johannes Antonius Olde-Olthof (b. 11/10/1928), Tarzan Shoes, Tulbagh, W. Cape, SA.
08/10/2017: Michael Piccione (b. 27/03/1963), KMP Footwear, Pinetown, KZN, SA.
09/10/2015: Barry Furber, Furber & Whittle [closed], Cape Town, W. Cape, SA.
09/10/2015: Steve Croudace (b. 22/06/1958), Leatherback Footwear, Pietermaritzburg, KZN, SA.
11/10/1994: Eric Ahlfeldt, Pelco, Port Elizabeth, E. Cape, SA.
11/10/2012: John Austin Rice (b. 17/06/1938), Courteney Boot, Bulawayo, Zimbabwe.
12/10/2001: Flaviano ‘Fluffy’ Bernardis, (b. 11/12/1944), Andreoli Shoes, Pinetown, KZN, SA.
13/10/2014: Kaps Singh (b. 08/04/1957), Famous Shoes, Pietermaritzburg, KZN, SA.
13/10/2020: Peter John Berry (b. 18/12/1935), retired, formerly Woolworths, Cape Town, W. Cape, 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 last week

Jino’s Clothing cc, Johannesburg, Gauteng, SA.
Kumesha Shoe Agencies cc, Durban, KZN, 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 (03 October 2024) - The current average hide price decreased by 0.89% to R2.774/kg from R2.799/kg a week ago. The current price is 0.99% lower than the average price a month ago and is 17.68% lower than the average price a year ago. The range of prices reported was as follows: Minimum price: R2.67 Maximum price: R3.00. 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:

SA Labels, Durban, KZN, SA. Label manufacturer.
SA Meat Industry Co (SAMIC), Pretoria, Gauteng, SA. Consignment inspection and statistics.

THIS WEEK LAST YEAR!

Difficult choices for expensive footwear

It’s slow, but we’re recovering

Stock Exchange News Service (SENS)
- AVI AGM
- Steinhoff final liquidation

Spanish September fairs ‘set trends’

READ IT HERE - S&V Weekly Newsletter Vol.9 No.41, October 9 2023

THIS WEEK FIVE YEARS AGO!!

Good news last week

Retail last week: Comment from 4 retailers on Saturday

G. Fox buys Industrial Safety Products

Closing
- Steps Shoes cc
- City Fashions

News from the Competition Commission: Forever New South Africa (Pty) Ltd (FNSA) v Forever New (Pty) Ltd (FN)

Milestone: Daya & Sons, will mark their 50th anniversary in November.

Changes
- Rob Black, former Makro merchandise manager for clothing & footwear, retires.
- Agent Reg Hattingh retires.

Cobblers' 2019 luncheon

READ IT HERE - S&V Weekly Newsletter Vol.5 No.41, October 14, 2019

Contact us

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

Next newsletter: Monday October 14, 2024. Ad and editorial deadline Friday 11 October.

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