Newsletter No. 11 / 01 April 2021
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Levi’s drives awareness around importance of clean drinking water
With the spotlight on World Water Day this March, Levi Strauss & Co is drawing attention to the environmental challenge of water pollution and how the company is actively trying to be part of the solution.
The fashion brand makes sole use of black and grey water in its manufacturing processes and prevents further pollution to South Africa’s water systems.
The World Economic Forum rates water issues as the top financial risk to the global economy, affecting both people and the planet. Two billion people live in high water stress areas, where the water demand is higher than what is available. Four billion people experience severe water scarcity worldwide.
Approximately nineteen million South Africans depend on the Vaal River System for drinking water. The country’s most significant river system is currently polluted by sewage, refuse, alien plants and manufacturing chemical pollutants, threatening the health of the environment as well as citizens.
In South Africa, the treatment of wastewater generated in rural and peri-urban areas is non-existent or scarce. Chemicals used in the manufacturing process of textiles either don’t decompose or decompose very slowly, adding to pollution of groundwater and the ecosystem’s degradation.
“Dam levels in South Africa are currently high. However, the safety of our drinking water is concerning. A healthy water supply contributes to a strong economy and reduces poverty,” says Candace Gilowey, head of marketing at Levi Strauss & Co. in South Africa. “At Levi’s, we aim to do more to remove hazardous chemicals from the apparel supply chain,” she adds.
The Recycle and Reuse standard states that facilities must adhere to the Zero Discharge of Hazardous Chemicals (ZDCH) wastewater guidelines and recycle over 20% of the manufacturing water, leaving drinking water unaffected.
WaterLess finishing techniquesLevi Strauss & Co. has also introduced 20 WaterLess finishing techniques worldwide that can save up to 96% of the water used in their apparel’s finishing processes. Eighty percent of the company’s key factories will become WaterLess by 2025. So far, the company reports having saved more than 3 billion litres and recycled more than 1.5 billion litres of water through the WaterLess innovations.
To raise awareness of the importance of clean and sustainable drinking water and celebrate the success of implementing its clean water-saving techniques, Levi’s is giving South African consumers clean drinking water in eco-friendly cartons.
Shoppers can collect these at the following Levi’s stores: Canal Walk; Cavendish; Clearwater; Eastgate; Gateway; Mall of Africa; Menlyn; Sandton; Tyger Valley and the V&A Waterfront. Bizcommumity
China pulls H&M Stores from maps as Xinjiang row grows
By Vlad Savov
Swedish clothing company outlets do not appear on Apple Maps and Baidu Maps searches in China.
Hennes & Mauritz (H&M) outlets appeared not to show up on Apple Maps and Baidu Maps searches in China on Friday after the fashion retailer found itself at the centre of an escalating spat over human rights in the contentious region of Xinjiang.
Users in Beijing reported that any searches for H&M in either Apple Maps on the iPhone or Baidu Maps returned no results. Competing retailers, such as Uniqlo outlets, continued showing as usual. A similar search in Google Maps showed more than a dozen H&M locations in the capital or its vicinity, though that service is only accessible to locals via the use of a virtual private network that skirts a state ban on products from the Alphabet unit.
Apple sources its mapping data in China from AutoNavi Software Co — owned by Alibaba Group — while Baidu collects its own. Representatives from Apple, Alibaba, Baidu and H&M did not immediately respond to requests for comment.
The disappearance of H&M’s physical stores from online maps comes after the retailer was removed from Alibaba’s e-commerce platform earlier this week as the controversy escalated.
The company had been blasted by China’s Communist Youth League and the People’s Liberation Army on Wednesday after social-media users dug out an undated statement about accusations of forced labour in the region’s cotton-picking industry. The statement appears to have since been removed from H&M’s website on Friday. Bloomberg
Tribunal approves Mr Price acquisition of Otto Brothers Distributors
The Tribunal has conditionally approved the merger whereby Mr Price Group Limited (“Mr Price”) will acquire the retail apparel business operated by Otto Brothers Distributors (Pty) Ltd (“Otto Brothers”) and its subsidiaries, trading as Power Fashion.
The Tribunal has concluded that the transaction is unlikely to substantially prevent or lessen competition in any market in South Africa. However, conditions have been imposed on the merger to promote local procurement within the Mr Price Group post-merger. This follows concerns raised by the Minister of the Department of Trade, Industry and Competition (“DTIC”) in relation to local procurement. As such, the merged entity must ensure that:
Mr Price is a national clothing retailer offering fashion and sport clothing, footwear, accessories, homeware and mobile products under various brands. Mr Price targets a wide range of customers and is well known for its fashion-value offering. It also has an established financial services division which offers credit, insurance products, cellular offerings and value-added services. Mr Price also operates in other African countries including Botswana, eSwatini, Ghana, Lesotho, Kenya, Namibia and Zambia.
The target business is Power Fashion, which is a national clothing retailer that services low to middle income households. It offers affordable clothing, cosmetics, mobile handsets, airtime, basic household items, electricity and other products. Power Fashion stores are typically located in ‘high street’ and community-centered malls and commuter nodes.
Mr Price – update on acquisition
Shareholders are referred to the group’s SENS announcement on 26 November 2020 which communicated the conclusion of an agreement to acquire high performing value retailer, Power Fashion, which currently has 173 stores across Southern Africa.
Power Fashion is a value-focused and cash-based retailer, servicing low to middle income households. It offers merchandise for the whole family, retailing largely apparel merchandise, which is fashionable, but not fashion forward. It focuses on the deep value segment of the market and its price positioning is strongly aligned to its target customer base.
All suspensive conditions, including approval by the South African and eSwatini competition authorities, have been fulfilled and the acquisition is effective on 1 April 2021.
Mr Price Group has frequently communicated to shareholders its strict investment criteria for an acquisition, which has guided it as it has considered several opportunities in the last year. In Power Fashion, the group will acquire a business that meets each of these closely researched criteria:
Mr Price Group will incorporate Power Fashion’s financial performance in its financial reporting at its FY2022 trading update in August 2021.
Rex True interim results December 2020
Revenue from continuing operations for the interim period decreased by 36.2% to R249.1 million (2019: R390.6 million), gross profit dropped 40.9% to R111.6 million (2019: R188.8 million), operating profit was 69.8% lower at R11.6 million (2019: R38.3 million) and profit attributable to equity holders of the parent contracted to R1 million (2019: R17.1 million). Headline earnings per ordinary share from continuing operations fell 85.2% to 12.7 cents per share (2019: 85.6 cents per share).
The groups’ property assets will undoubtedly be impacted by changes in tenant’s space requirements necessitated by social distancing and the advent of remote working. The tenant base proved to be resilient during the period of the lockdown. With respect to undeveloped properties, the group will continue to seek opportunities that will yield a satisfactory return on any capital employed taking into consideration the large capital requirements and the long term nature of any property development.
The group’s water assets are performing and are successful working examples of private-public partnerships within the water and sanitation sector. South Africa is classified as a water-stressed country and can not afford a water crisis. It is therefore of utmost importance that water security is ensured across the country. SAWW, with its skills and experience, is ready to play a key role in meeting this objective in the sector.
Notwithstanding the current trading conditions and many uncertainties which lie ahead, the group will strive to achieve reasonable targets within current operations. We will also continue to utilise our entrepreneurial flexibility to seek opportunities in other sectors of the economy and by doing so further diversify our portfolio of investments.
References to future financial performance has not been reviewed or reported on by the group’s external auditors and does not constitute an earnings forecast.
Did you know……..
. “Three out of five fast fashion items end up in a landfill” (Clean Clothes Campaign, 2019)
Recycling is, unsurprisingly, a massive problem in the fast fashion industry. We rarely think about where our clothes go when we don’t need them anymore. Fixing your clothes instead of throwing them away can make an incredible contribution to the reduction in global pollution.
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