1 of 2017

                                                                                                  Newsletter No 17/10 May 2024

                                       

 

 

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Global online retailers in Patel’s sights

By Khulekani Magubane

Dressed to invest – Minister of trade, industry, and competition Ebrahim Patel at the TFG factory in Cape Town. Image: Supplied

Popularity of Temu and Shein a problem for local textile sector

The government is on a mission to confront global online retail platforms that use tariff loopholes in South Africa to undermine locally-produced goods and retail stores, says trade & industry minister Ebrahim Patel.

“The key principle is to ensure that everybody is treated equally, that South African retailers who have to pay full VAT and who have to pay full customs duties should not be disadvantaged against any other player, and that South African online retail platforms are not disadvantaged against those who operate abroad and that [our] manufacturers are not disadvantaged.

“We will be working through that in due course, and I think what all of us recognise is that this is a matter that needs to be addressed with some urgency,” Patel said at a meeting with textile workers at the TFG clothing factory in Cape Town.

Business Times reported last week on the growing popularity of Temu and Shein, online retailers originating in China, and how their aggressive business models imperil local competitors and brick-and-mortar clothing stores. 

Concerns had been raised over the two companies taking advantage of import loopholes to bring in products in small quantities, said Christele Chokossa, a retail consultant at Euromonitor. Although South Africa imposes a 45% tariff on imported clothing, the e-commerce giants pass the tariff on to the customer when the shipped package arrives. 

Patel said local textile’s biggest import-related challenge was getting to grips with the dominance of Temu and Shein.

“We’ve identified challenges that we need to deal with in the import space. The most significant one is to address the emergence of platforms like Temu and Shein and ensure that there is equality of treatment, that everybody is treated equally, that everyone has to pay the full customs duties and the full VAT, that South Africa is not left poorer as a result of any gaps in our regulatory environment.”

Patel said the clothing, textile, footwear, and leather industry’s master plan had in five years transformed the textile manufacturing and retail industry, which was under siege from cheap imports, into an industry that supports more than 500,000 South African jobs.

“Over this period, we have been able to take an industry that has been decimated by high levels of imports and stabilise that sector. Retails have been able to expand local procurement by 51% in local units in a number of key products we have recognised as the ripest for localisation.”

The master plan entailed an increase in import tariffs from 40% to the World Trade Organisation’s maximum rate of 45% on a number of clothing lines.

A competitiveness package administered by the department and the Industrial Development Corporation (IDC) was also introduced, allowing local manufacturers to acquire more and better machinery and modern technology. 

The plan helped local manufacturers grow their share of the domestic market and increase purchases from domestic suppliers as part of enhancing their value chain competitiveness. 

TFG Group CEO Anthony Thunström said the past five years of collaboration between the government and the industry were “very successful” in saving an industry that was previously “on its knees and was truly terminal due to a lack of investment”.

 “We are very proud of the number of jobs it created as that is one of the biggest challenges we can face as a country if you look at it from a business lens. And, employment aside, it is good to get the best margins in South Africa and react much more quickly to international fashion trends.”

Trade Call Investments Apparel CEO and Apparel and Textile Association chair Herman Pillay said textile manufacturing had turned the corner in South Africa after facing import-related challenges.

“We have seen a huge improvement and a 51% increase in local manufacturing. The establishment of new companies, including black-owned companies, is also positive. Great support has come from retailers. We are seeing product promotion in a number of sectors and subsectors.

“The collaboration that exists under the master plan has been one that should be used as a case study to show that a concerted effort by government, labour, and business can really drive change in local procurement.”

South African Clothing and Textile Workers Union (Sactwu) president Susan Khumalo said while the master plan revived the sector, unions expected the industry to make more progress in improving working conditions and wages throughout the value chain.

Patel said while the level of imports by volume of clothing items had decreased by as much as 34%, the revenue from clothing imports had gone up, indicating that the authorities had improved revenue collection and were penalising exporters who dodged VAT and import duties.  

 

 

 

 

 

 

 

Stüssy & Levi’s launch their Autumn 2024 collection capsule

Source: Joburg style Stüssy & Levi’s launch their Autumn 2024 collection capsule

Stüssy & Levi’s have introduced a new Autumn 2024 collection capsule, a four-piece range inspired by the California-based brands’ home state.

Building upon their two previous releases last year, the range comprises a leather jacket, crispy rinse trucker, matching jeans, and a leather belt. Stüssy continues to apply its signature aesthetic to staple Levi’s garments, and each piece in the collection is refined with custom fit, design and finishes.

Crafted from white Italian leather, the leather jacket comes in a slightly cropped, boxy fit and features an embroidered Stüssy stamp bearing slogan “Built Tough Worldwide Since 1980”, enlarged co-branded button shanks, and custom Two-Horse Pull patch with the Stüssy script logo.

Inspired by classic Western wear, the leather belt is offered in a tan colourway and features embossed branding with black paint detailing.

The Crispy Rinse Trucker shares the same silhouette, slightly oversized and offered in a two-tone (brown & black) denim with contrast stitching.

Special features include an embroidery stamp below the front left chest pocket plus a co-branded patch and button shanks.

Finally, the Crispy Rinse Jean comes in a matching finish and is styled as a 5-pocket pant with an embroidered stamp on the back left leg, button fly closure, contrast stitching, and co-branded elements.  Bizcommunity

 

 

 

Berzacks

 

 

 

Northlink TVET College

 

The Institute of Commerce and Management – SA, in partnership with the National Skills Fund has availed funding for purposes of student placements.  Northlink TVET College had been identified as a Skills Development Provider (SDP) to solicit placement for our students.

An attractive student stipend of R5500,00 for a period of 18 months will be paid directly to the student.  It is payable on the last working day of each month.  Compulsory and legislative monthly deductions that will include UIF, will be made.  The stat date will be 01 June 2024 for the project – for 18 month.  

If this possibly describes your contribution to skills development, please email me your interest to host a student, for NC: N6: Clothing Production.  We are required to complete the contracting from 09 – 15 May 2024

Kindly advise if would interest and advance your business.  Riaan.Hoffman@northlink.co.za

 

 

 

Is the Luxury Watch Bubble Bursting?

By: Kisha Reader

 

Now is not the time to sell, rather use your luxury watch to unlock wealth.

The trade in second-hand luxury accessories, including watches and handbags in recent years has seen a boom but analysts predict that the bubble is bursting with investment in luxury watches and South Africa is following Europe and America’s trends.

The right watch brands as an asset class are a good investment and have shown strong growth in the past several years despite high inflation and other economic pressures. According to the latest market forecast, while this segment is expected to grow annually by 3.44% over the next five years, analysts have indicated that when it comes to investment in watches, the bubble has started to burst with prices seeing a decline.

“Second hand luxury watches, particularly men’s watches like Rolex, Patek Philippe and Audemars Piguet, have gained the most value over the past few years,” says Charles Meyerowitz, CEO at Lamna. “Now is not the time to sell so it comes as no surprise that we are seeing an increase in these items being used to access quick, discreet finance.”

The global second-hand market is said to have a value of USD$22-billion with Rolex being one of the biggest brands and the most sought-after. This, he adds, indicates just how appealing luxury watches and jewellery are to South African collectors and luxury enthusiasts.

“We attribute the surge in the pre-owned luxury goods sector due to demand from China which has now come under pressure,” he explains. “At Lamna we’re seeing a steady growth of around 20 percent annually, specifically with the use of luxury watches to secure fast finance.”

Most notably, Meyerowitz says that millions of rands in luxury watches are loaned annually through Lamna.

“From Rolex, Cartier and Patek Philippe watches to Hermes and Louis Vuitton handbags or fine art, even the posh are turning to asset finance to access their money,” he says. “Lamna has started the year some 30 percent up on the previous year.”

According to the latest report by Luxity, an online reseller of pre-owned luxury goods in South Africa, the highest return for a watch brand is Rolex, returning 87,5 percent on average when comparing resale price to retail.

Using a luxury watch to secure a loan is becoming an increasingly common way to access capital says Meyerowitz. “The boom in asset finance to unlock wealth quickly against assets like watches is fast becoming normalised as a viable alternative to finance,” he adds.

He notes that the basic principles of asset-backed loans haven’t changed much. “You provide an asset in return for finance and once the loan is paid up you receive the item back,” he explains. “New-age asset finance is more sophisticated and secure which is why more clients are using their luxury items like watches and handbags to unlock finance against these lazy assets.”

“It’s the perfect and most responsible solution to get access to money when liquidity challenges present themselves,” he explains. “The average loan at Lamna on a luxury watch is in excess of R120,000 placing customers firmly in a high-net-worth bracket compared to an average unsecured loan.”

He points out that almost 90 percent of Lamna’s clients are in a high LSM bracket and is slightly weighted to a male skew with the majority in the 20-60 age bracket. “While watches and jewellery typically make up around 5 percent of loans, Lamna does get more unusual items like art, handbags and prestige vehicles,” he says. “Leveraging a luxury item as a short-term loan option is a great way to manage a temporary liquidity challenge. Our clients are generally quite attached to their assets which means that almost 98 percent of our clients return to redeem their items.”

“Loans on watches are typically taken for up to 3 months, and many are repaid within the first 1 to 2 months,” he adds. “There are no penalties for early settlement providing a responsible way to bridge the gap.”

He says that one of the biggest benefits of using a watch to access finance is the speed at which funds are released. “Typically funds against loans on luxury items are released on the same day and you receive around 60 percent of the retail value,” he adds.

According to a recent report by Morgan Stanley, Rolex is expected to remain unchallenged for years to come with greater sales than that of Cartier, Omega, Audemars Piguet, Patek Philippe and Richard Mille combined. The report released in February estimates that Rolex has increased its market share by over 30 percent with sales cresting at USD$10-billion.

In addition, Meyerowitz says that the company also offers bridging finance and vehicle finance against assets, contracts, and court cases.

“Realising the value of a lazy asset like a watch through an asset backed loan is a quick and easy way to raise capital without the hassle of fees, auctions or dealing with untrustworthy members of the public should you choose to sell,” he says. Unlocking your money in your assets might just be the perfect short-term liquidity solution because you will always have access to your asset without selling it.”

Fashion, Lifestyle, Trends

 

 

 

 

 

Formal Dress

In Western dress codes, a black-tie event is technically only ‘semi-formal’, as fully formal dress is ‘white-tie’ – the dress code that requires male guests to wear coat-tails.

 

 

 

 

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