Newsletter No.01     20 January 2017

Wishing all readers and very Happy 2017!

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TFG shares shoot up as retailer provides a rare bright spot in the sector.

TFG’s share price shot up more than 6% in midday trade on Monday after the retailer said its Christmas sales exceeded expectation.

Picture: Sunday Times
In the nine months to December 24, TFG reported a 14.5% rise in group sales.

Between November 27 and December 24 of 2016, sales increased by 14.6% compared with the year-earlier period.

Growth for TFG International was 47.9% in sterling, and growth for TFG Africa was 11.5% with same-store growth of 5.6%. Price inflation in the Africa division averaged 8.5%.

TFG’s results are a welcome surprise after updates from Woolworths and Truworths sparked fear of a further downturn in the retail sector.

TFG’s broader range of merchandise categories compared with its retail peers has cushioned it against the economic headwinds that have depressed the retail sector.

Its brands include apparel retailers Markham, Due South and G-Star Raw, jewellery brands Sterns and American Swiss, and furniture store @home.

Last week Truworths reported a 21% increase in group sales for the 26 weeks to December 25, to R10.2bn (including sales from its UK fashion footwear chain Office Retail Group). However, Truworths’ like-for-like retail sales (excluding Office Retail Group) decreased by 3%.

Woolworths reported a volume decline in both the clothing and food divisions in the 26 weeks to December 25.

At 11.15am on Monday, the TFG share price was up 5.91% at R169.49, valuing the company at about R35bn.

Source DBpro 

Edcon gets buy-in for new company

By Colleen Goko

It was a busy end to 2016 for Edcon as the retailer cleared what CEO Bernie Brookes called “the last hurdle” in a deal that will see the group come under its creditors’ ownership.

In mid-December, SA’s largest clothing retailer launched a compromise sanction process for the proposed restructuring of the group.

The process involved going to senior lenders and asking them to accept a shareholding in the company that will be formed following the restructure in exchange for a reduction in the debt owed to them.

Days before New Year, 95.45% of Edcon’s senior secured creditors and 84.18% of super senior third-ranking creditors voted to adopt compromise proposals.

Once the restructuring process is complete, Edcon’s debt will fall from R29bn to R7bn.

Brookes said he was pleased that the group would soon be able to move forward, having substantially reduced its debt. “In tandem with the restructuring, we continue to advance all of our other change initiatives at a rapid rate.”

Brookes said the group had made tremendous progress in enhancing the customer experience with better service and products; improving employee motivation and authority levels; and simplifying many processes and structures.

“We believe these initiatives will return Edcon and its various stores to be leading retailers in their respective sectors.”

Following the acceptance by note holders, Edcon said it was on track to implement the restructuring agreement during the course of January.

The debt-to-equity deal was announced in September and entailed a comprehensive capital restructuring of the group. Brookes said at the time a four year plan was in place that would end with a JSE listing.

The Competition Tribunal approved of the transaction in November. Some of the private equity investment firms and banks that will own Edcon are Franklin Templeton, Harvard Pension Fund, Barclays Africa and FirstRand.

For the eight months to November 30 2016, Edcon group sales were slightly ahead of forecast and the gross profit margin was slightly behind, in each case declining 7% compared with the year-earlier period. The figures were based on preliminary internal information, Edcon said. Credit sales were in line with estimates.

“Edcon’s fiscal year-to-date performance has been affected by a large-scale stock clearance initiative and adverse macroeconomic conditions in SA,” the company said.

Source: Business Day

Fast fashion has become trend today: Study

Consumers today treat lowest-priced garments as nearly disposable, and are discarding them after just seven or eight wears, according to a recent study. In fact, consumers now keep clothing items of every category only about half as long as they did 15 years ago, indicating that fast fashion has become the trend. This has led to huge rise in apparel sales.

The clothing production has doubled from 2000 to 2014 and the number of garments purchased each year by the average consumer has increased by 60 per cent. The production of garments exceeded 100 billion for the first time in 2014—this means on an average, 14 clothing items per person on the earth, says the study carried out by McKinsey & Co.

In five large developing countries—Brazil, China, India, Mexico, and Russia—apparel sales grew eight times faster than in Canada, Germany, the UK and the US since 2000, according to the McKinsey & Co website.

There are numerous reasons for drastic increase in sale of clothing items in recent years. Industries are cutting costs and streamlined their supply chain to increase business. The outcome is that the price of clothing has fallen relatively to the price of consumer goods.

The sales have increased overlooking the effect on environment while producing apparel. However, clothing companies have been unable to match their sales gains with commensurate improvement in environment.

The study highlights that innovation in the way clothes are made has not kept pace with the acceleration of how they are designed and marketed. It has become difficult to match the increasing demand of the consumers for clothing items in all apparel categories.

The productivity can be improved by focusing on resolving issues such as labour conditions, wages, effect on environment and safety measures among others. 

Fibre2Fashion 

Veens Clothing unveils ‘Creative Man’ 2017 Collection featuring Viktoh YBNL

Nigerian designer, Veens Clothing has again raised the bar of casual native dresses in the fashion industry with these exciting and amazing new collections tagged “Creative man” which features YBNL record label star, Viktoh.  Veens, the co-costumier for the 2011 Face of Sleek Pageant, and a designer for quite a number of Nigerian Artistes alongside top-notch corporate workers, has remained a force to be reckoned with in the industry when it comes to creativity in fashion.

The creative director, Vincent Osaromeh has been resilient and consistent over the years to scaling through the hurdles of breaking into the world fashion market and setting trends for others to follow, thereby making Veens Clothing a precedence and the hub of all designers.

Veens Clothing has lot of branded fashion products in stock like the Veens casual shirts, corporate suits, gowns, Agbada wears, and other peculiar music video artistic designs and the collections are now the most sought-after in Nigeria, UK, and the U.S

These series of designs called ‘The Creative Man’ collection are definitely the trend for 2017. My Newsroom

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Did you know….

Platform shoes are nothing new: Chopines, which were popular across Europe and Asia since the 16th century, were outrageous platform shoes that offered a platform of anywhere from 6 to 24 inches. They were the predecessor to the modern-day high heel.

Greek prostitutes had sayings etched into the bottoms of their shoes like “follow me” (that would show up in the sand) to attract customers.