Newsletter No 21 /13 June 2025
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SA faces long road to recovery from Trump tariffs, says OECD
By Khulekani Magubane
Deputy finance minister Ashor Sarupen Image: Freddy Mavunda
But report forecasts monetary policy easing and two-pot pension payouts will enhance economic activity and consumption
In a mixed outlook for South Africa, the Organisation for Economic Co-operation and Development (OECD) warns that South Africa’s recovery from the US tariff regime will be slow, though two-pot pension system payouts will increase spending in the local economy.
The OECD report came in the same week that Stats SA said the economy grew by just 0.1% in the first quarter.
The report hails reforms South Africa has implemented in its network industries through Operation Vulindlela.
It says the country’s economic activity is projected to rise to 1.3% this year, and to 1.4% in 2026. While contractionary fiscal policy limits government spending, monetary policy easing and two-pot system withdrawals will enhance activity and consumption.
“Exports will gradually increase, affected by trade tensions. The pension reform, which eases access to retirement funds, will support consumption. Investment will benefit from lower interest rates. The increase in activity will help slightly lower the unemployment rate to about 32% in 2026,” the report says.
Earlier this year, US President Donald Trump imposed tariffs on steel and aluminium imports into the US, increasing them to 50% this week. He also announced “reciprocal” tariffs on countries, including South Africa, only to suspend them for three months.
The OECD report says reforms will ease bottlenecks in rail transport and ports, giving much-needed support to exports. Activity is projected to grow moderately during 2025 and 2026, limited by uncertainty.
“Reforms to state-owned logistics enterprise Transnet, as well as measures to increase competition and create the conditions to crowd in private sector investment, will continue to ease bottlenecks in rail transport and ports,” it says.
“However, trade tensions are heightening uncertainty. Exports will gradually increase, weighed on by the planned increase in tariffs on US imports. Inflation will ease in the second quarter of 2025, after the decline in global oil prices, but will strengthen during the second half of 2025 and in 2026, as activity strengthens.”
Deputy finance minister Ashor Sarupen said global trade tensions, inflation volatility and heightened policy uncertainty had made this a challenging environment for all open economies — and South Africa was no exception.
“South Africa’s growth is forecast at just 1.4% in 2025, with risks remaining firmly tilted to the downside. Over the medium term, growth is expected to average 1.6%, constrained by a weaker global outlook, persistent logistics constraints, and higher borrowing costs.”
Sarupen said the recent budget tabled by finance minister Enoch Godongwana highlighted a commitment to debt stabilisation at 77.4% of GDP in 2025/26, sustaining a primary budget surplus, and investment in the social wage as well as infrastructure.
The launch of phase 2 of Operation Vulindlela is a step towards further accelerating structural reform. With a focus on digital infrastructure, dynamic cities and improved basic services, this work complements our broader strategy to build a capable state and reduce regulatory and infrastructure bottlenecks — priorities the OECD has rightly emphasised.
Erik Peterson, MD of consulting firm Kearney’s global business policy council, said rising fragmentation could contribute to lower growth at a global level and cause a resurgence in inflation, as well as higher costs for consumers and businesses.
“Sharp escalations in protectionist trade measures — a reflection of such broader fragmentation — are creating economic headwinds. While such policies are often intended to build domestic resilience and protect strategic industries, they also carry downside risks.
“Implemented poorly, they can stifle competition, undermine productivity and trade growth, disrupt supply chains, lower investment and deepen the economic gap between emerging and advanced economies.”
Peterson said Kearney’s projections indicate that the Middle East and Africa will “edge” Asia and Australasia as the fastest-growing economic region in the world, maintaining steady growth amid global trade turmoil.
“Nevertheless, our baseline projections reflect downgraded prospects for the global output growth in the short term, amid rising complexities … strategic leaders are fortifying their business for what lies ahead and pinpointing areas of opportunity,” he said.
This week, Stats SA announced that the local economy grew 0.1% in the first quarter of 2025. It noted that without a boost from agriculture, GDP would have contracted by 0.3% in the first quarter.
“Transport, storage and communication were the second-largest positive contributors, with gains recorded in land transport, air transport and transport support services. Consumer activity was stronger, with trade, catering and accommodation expanding by 0.5%. Retail trade, motor trade, accommodation and food and beverages contributed positively.”
A statement from Stats SA said mining and manufacturing were the biggest drags in the first quarter. Together, both industries shaved 0.4 of a percentage point off GDP growth, while mining weakened by 4.1%, with platinum group metals the most negative contributor.
“Coal, chromium ore, gold, copper and nickel also disappointed. Iron ore, manganese ore and diamonds recorded gains, but not enough to lift the industry into positive territory.”
Stats SA said manufacturing activity slowed on the back of weaker production levels for petroleum and chemicals, food and beverages, and motor vehicles and other transport equipment.
Three of the 10 manufacturing divisions experienced a favourable quarter, according to the latest monthly manufacturing release — including textiles and clothing; wood, paper and publishing; radio, television and communication; and professional equipment. 
Roxy Apparel: Pioneering Sustainable Denim Manufacturing in Hammarsdale
Good news doesn’t often come from the clothing and textile sector — so when it does, it deserves recognition. We’re especially grateful for those who still have the confidence to invest in this critical industry. Two such visionaries are Naresh Modi and Paul Schmidt of Roxy Apparel, who have recently launched a locally based, sustainable laundry and denim manufacturing plant in Hammarsdale, KwaZulu-Natal.
Their new facility features cutting-edge Jeanologia technology, including laser systems, ozone treatment, and high-efficiency washers. This equipment is among the most advanced globally and represents a significant step toward reducing the environmental impact traditionally associated with denim production.
The washers in use consume at least 50% less water than conventional machines and rely on environmentally friendly chemicals, making a direct and meaningful contribution to water conservation and chemical reduction.
Laser marking enables consistent, chemical-free finishes with virtually endless creative possibilities — all while eliminating the harmful substances typically involved in garment finishing.
Ozone technology revolutionizes denim processing by removing starch and loose dye without using any water, chemicals, or heat. It also plays a role in cleaning pockets and surfaces and can even provide a vintage aesthetic to denim garments — all in a sustainable manner.
In addition to the laundry, Roxy Apparel has established a sewing facility with all key manufacturing steps being automated —in addition the in-house patternmaking and automated garment cutting — ensures consistent quality and specifications are met.
Naresh and Paul have taken thoughtful, deliberate steps to minimize the carbon footprint of denim production. As a result, retailers can be assured that garments produced at Roxy Apparel are high quality, low impact, and proudly South African.
Located in Hammarsdale, the company is also making a significant social impact, offering much-needed employment in an area where many clothing and textile factories have shuttered over the past two decades.
With a strong infrastructure, sustainable focus, and passionate leadership, Roxy Apparel is well positioned to become a changemaker in the South African textile industry.
Appointments:-
Durban, KZN, SA – Mohamed Dewan was appointed General Manager of Boardriders South Africa, a subsidiary of the LA Group, in April.
Before joining Boardriders, Dewan was appointed as COO, Merchandise and Marketing at Tekkie Town, a division of Pepkor, where he was a member of the Executive Committee. His role focused on strengthening the brand’s product and commercial strategy. He spent nearly five years with the company. Under his leadership, the business was refocused into Sportswear and established new categories in new markets.
Prior to that, Dewan held an executive position at the Studio 88 Group for close to a decade, contributing to the group’s merchandise strategy and expansion efforts, including brand repositioning and acquisition projects. He exited the business in 2018.
Earlier in his retail career, he spent several years in senior management at Edgars and was involved in Edcon’s official events store rollout during the 2010 FIFA World Cup.
Commenting on his current role, Dewan said: “Boardriders appealed to me because of the global momentum behind the brands we represent. RVCA, in particular, is an exciting brand with strong potential in the market. With ABG’s renewed focus and the LA Group’s distribution experience, we see a great opportunity to reignite surf and skate culture in the region.”
Dewan succeeds former GM Jethro Jewell, who resigned earlier this year. Jewell said he wished Dewan “every success” and remains “passionate about the brand.” S&V
Mr Price – change to the board
The Mr Price Board of Directors (Board) notified shareholders that Stewart Cohen, co-founder and Honorary Chairman of the Board, will retire on 27 August 2025. Stewart is due to retire by rotation at the upcoming Annual General Meeting (AGM) and has indicated he will not offer himself for re-election.
Mr Price final result March 2025
Revenue accelerated by 7.9% to R40.9 billion (R37.9 billion) bringing up profit before finance costs and finance income by 8.9% to R5.8 billion (R5.3 billion). Net profit for the period went up by 10.7% to R3.8 billion (R3.4 billion). Profit attributable to equity holders of parent increased by 11.2% to R3.6 billion (R3.3 billion). Additionally, headline earnings per share grew by 10.7% to 1 424.0 cents per share (1 286.2 cents per share).
Dividend
A final gross cash dividend of 593.50 cents per share was declared for the 52 weeks ended 29 March 2025, a 12.7% increase against the prior year.
Company outlook
The global economy has been characterised by uncertainty in 2025. Significant shifts in trade partnerships and the potential of US enforced tariffs have threatened growth prospects across markets. The South African economy has not been spared from this impact and its forecast GDP growth has been revised downwards from the previously bullish outlook at the end of 2024.
Prior to this, South Africa’s GDP growth over the previous decade of 0.7% has not been conducive to fostering a healthy business environment. A highly competitive and low growth economy requires the government reform agenda to be accelerated in order to create higher levels of employment and stimulate economic activity.
The consumer environment in South Africa remains volatile. In the short-term, consumer relief was supported by low inflation, lowering petrol prices and interest rate cuts of 100bps which collectively increased disposable income. Real wage growth has experienced some level of recovery, however the sustainability of an improving consumer environment in South Africa in the medium-term could be challenging due to the uncertainty transcending from the global and domestic economies.
Notwithstanding the volatile environment, the group remains committed to delivering differentiated fashion-value merchandise, which continues to be recognised and supported by its loyal and growing customer base. Mr Price Apparel remains the most shopped retailer in South Africa according to MAPS, recognition that supports its commitment to being the customers’ value champion.
Group retail sales in Q1 FY2026 to 31 May increased 11.6%, with all trading divisions gaining market share in April 2025 (latest available RLC data).
The group is confident that its business model, value positioning and brand power will enable it to outperform the market through varying economic cycles, displayed by its consistent market share gains over the past two years. Focus remains on extracting maximum value through profitable market share from its 15 trading chains and investment into strategic enablement projects, predominantly in the technology and supply chain functions. Forecast capital expenditure for FY2026 is anticipated to be R1.6bn, with approximately 200 new stores and increased investment into store revamps, supply chain and technology.
TFG final results March 2025
Revenue for the year grew to R62.6 billion (2024: R60.1 billion) while operating profit before finance costs rose to R6.2 billion (2024: R5.9 billion). Profit for the year attributable to owners increased to R3.2 billion (2024: R3.0 billion). Furthermore, headline earnings per share were reported higher at 1 015.6 cps (2024: 970.7 cps).
Final ordinary cash dividend declaration
Notice was given that the directors have declared a final gross cash dividend of 230.0 cents (184.0 cents net of dividend withholding tax) per ordinary share for the period ended 31 March 2025.
Preference cash dividend declaration
Notice was given that the directors have declared a gross preference dividend (no. 177) of 3.25% or 6.5 cents per share (5.20 cents net of dividend withholding tax) per preference share for the period ending 30 September 2025.
Results presentation webcast
A live webcast of the results presentation will be broadcast at 11:00 am (SAST) on Friday, 6 June 2025. A registration link for the webcast will be available on the Company’s website at www.tfglimited.co.za. The slides for the annual results presentation will be made available on the Company’s website prior to the commencement of the webcast. A delayed version of the webcast will be available later on the same day.
Company outlook
The South African economy is starting to show signs of improvement with positive inflation, interest rate, fuel cost and other indicators, although low consumer confidence, as well as the possibility of further loadshedding, remains a concern. For the eight weeks ended 24 May 2025 TFG Africa’s sales have increased by 9.9%.
We expect to open over 100 new stores during the 2026 financial year, while continuing to optimise our store portfolio. The Riverfields distribution centre is now close to fully operational, and this, together with our other growth and efficiency strategies are expected to continue to improve operating margins and capital returns in 2026 and beyond. While the UK economy remains under pressure, we are encouraged both by the continued strong performance of White Stuff, and the recent improvement in Spring/Summer sales in other brands within the UK portfolio. Sales growth was 10.8% (in GBP) for the eight weeks ended 24 May 2025. Excluding White Stuff, which is non-comparable for the period, sales declined by 1.7%.
In Australia, sales have contracted by 3.4% (in AUD) in the eight weeks ended 24 May 2025. Although trading conditions remain challenging, the economy appears to be stabilising with two quarter-percent interest rate reductions in recent months. After a weaker April, sales in May grew by 2.3%.
Through our strong balance sheet and robust strategies, we are confident in our ability to deliver against our medium- and long-term targets, and we are well positioned to benefit from improved macroeconomic conditions and consumer recovery across all geographies to drive long-term shareholder value creation.
Wardrobe Malfunctions
Entertainment Tonight / Via youtube.com
During a Borderlands fan event in 2024, Cate Blanchett had a wardrobe malfunction, but her costar, Jamie Lee Curtis, stood behind her to shield her. Jamie told Entertainment Tonight, “Nothing is going on! You know what is going on? I got her back.”
The two stayed closed while posing on the red carpet.
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