Newsletter No. 22 / 19 June 2020
Click on any ad to go to the advertisers website..
Edcon serves retrenchment notices to 22,000 employees.
The retail company’s business rescue team said in order to save the retail giant from liquidation, staff numbers needed to be reduced as sale figures continued to tumble.
South Africa’s biggest clothing retailer Edcon has served at least 22,000 employees with notices of retrenchment.
The retail company’s business rescue team on Wednesday said in order to save the retail giant from liquidation, staff numbers needed to be reduced as sale figures continued to tumble.
In March, Edcon announced that it was under business rescue and unable to pay its suppliers.
The embattled retailer – which owns Edgars and Jet, among others – said 22,000 jobs would be axed as it struggled to stay afloat due to debt and weak sales.
In a statement issued by the group, the retail pioneer blamed its demise on the COVID-19 pandemic and the nationwide lockdown.
However, it also acknowledged factors that had contributed to its downfall long before coronavirus gripped the country.
Edcon was among many retail companies in South Africa that faced uncertainty after the industry took a hit during the lockdown, which limited the sale of some clothing items. EWN
Michael Kors quits New York Fashion Week
Michael Kors will not take part in New York Fashion Week this year, and will instead host his own presentation in October or November for his Spring 2021 collection.
The 60-year-old designer and his eponymously titled fashion brand – which is best known for making handbags and accessories – revealed over the weekend that he will not be showcasing his latest collection at the upcoming fashion extravaganza in New York, which was due to take place in September this year.
Instead, Kors will be hosting a presentation between October and November to debut his new range for Spring 2021.
The designer said in a statement: “I have for a long time thought that the fashion calendar needs to change. It’s exciting for me to see the open dialogue within the fashion community about the calendar – from Giorgio Armani to Dries Van Noten to Gucci to YSL to major retailers around the globe – about ways in which we can slow down the process and improve the way we work. We’ve all had time to reflect and analyse things, and I think many agree that it’s time for a new approach for a new era.”
Kors’ announcement follows the ongoing coronavirus pandemic, which has forced many events in the fashion calendar – including the CFDA Awards, Paris Haute Couture Week, and the New York Fashion Week Resort – to be postponed or cancelled.
He added: “It is imperative that we give the consumer time to absorb the fall deliveries, which will just be arriving in September, and not confuse them with an overabundance of additional ideas, new seasons, products, and images.”
Moving the date of his collection’s debut by over a month will collapse the time between the Kors’ spring show and its delivery, but it won’t qualify as a see-now-buy-now show, which some of his fellow designers are advocating for.
He explained: “Prior to the late 1990s, the New York spring collections were shown from late October to the beginning of November, after the Paris collections. That calendar was in place for many decades and worked quite smoothly, and particularly in this age with the speed of social media, showing the collection closer to when it will be delivered makes logical sense to me.”
As of the time of writing, Kors has not confirmed the exact dates for his own presentation, but New York Fashion Week is due to take place between September 11 and 16. IOL
The Dolce & Gabbana store has just opened in Hong Kong
Department stores, fashion labels and luxury brands closed their stores all around the world with the Coronavirus crisis, but Dolce & Gabbana organized itself and opened its flagship store on Canton Road in Hong Kong.
A noteworthy opening at this complex time
Going ahead with the store opening is a sign of confidence in its Chinese aficionados. Despite the fact that the virus is slowing down on the continent, Hong Kong is keeping draconian measures in place, such as electronic tagging of all new arrivals. Hong Kong is suddenly concerned about a new wave, fearing that the previous relaxation of the restrictions in March was too premature. However, the Milan-based designers have radically extended and reorganised their existing flagship store on Canton Road, a key shopping street in this city of 7.5 million people.
A Design with local references
The 363-m2 store incorporates a host of local references – such as the coloured stone and glass mosaic representing the bauhinia flower, the symbol of the city of Hong Kong. Created using Italian artisanal traditions and located at the store entrance, it is where Chinese culture meets Bel Paese craftsmanship. In line with the “Napoleon and Josephine” renovation of its Parisian store revealed in January, the Hong Kong store blends Italian style and flair with Chinese exoticism.
Its facade presents an imposing 18 metre-high screen composed of overlapping rectangular frames made of Italian white-veined silver marble, visually demarcated by white beams of light.
Inside, designers Stefano and Domenico play with Chinese symbolism with products specially designed for the Asian market featuring dragons and other Chinese lanterns.
The store is spread over two floors: the first is dedicated to womenswear, while the male wardrobe is found in the basement. It boasts a blend of polished grey Carnico marble and large vertical lines in polished smoked redgum wood. The all-mirror ceilings sparkle, embellished with polished brass. In short, it embodies the meeting between opulence and Sicilian Baroque and local Chinese materials. Promostyl
Massmart – Covid 19, sales and trading update.
Shareholders are referred to the SENS announcement issued on 18 May 2020, which provided an update of the impact of the Covid-19 national lockdown on the Massmart Group.
As previously reported, Massmart was unable to trade in the majority of general merchandise categories, home improvement and liquor products for most of the month of April, which had a significant impact on total sales during that month. Moving to level 4 lockdown from the beginning of May enabled Massmart to gradually start trading in more product categories. Most notably, our Builders stores throughout the country were able to recommence sales to the general public. However, restrictions on the sale of liquor and tobacco products remained in place throughout the month of May. Missed liquor sales for the months of April and May are estimated to be approximately R2.3 billion based on prior year sales. In line with level 3 lockdown regulations in place from 1 June 2020, Massmart is now able to trade in all product categories with the exception of tobacco and related products. Trading hours relating to liquor are however still restricted, with no liquor sales allowed from Friday to Sunday and on public holidays.
As previously reported, for the 19-week period ended 10 May 2020, total sales decreased by 11.9% over the prior year, with comparable store sales decreasing by 12.1% over the same period. With the easing of the lockdown from level 5 to level 4, pent-up demand for home improvement products drove strong sales at our Builders stores during May, while pent-up demand for general merchandise goods supported better sales performance at Makro and Game as the month progressed. Consequently, total sales for the 23 weeks ended 7 June 2020 amounted to R34.8 billion, which is 10.3% lower than the prior year, while comparable store sales were 10.5% lower than last year. Sales from our South African stores amounted to R31.3 billion, 11.5% lower than last year, with comparable store sales decreasing by 11.5%. Total sales from our ex-South Africa stores amounted to R3.5 billion, or 1.2% higher than the prior year, with comparable store sales decreasing by 0.3%.
Estimated impact of Covid-19 lockdown regulations
The Covid-19 national lockdown has had a significant impact on the trading performance of Massmart as a Group. For the 9 week period from 30 March 2020 to 31 May 2020, total sales were R4.6 billion lower than the same period during the prior year. Operating costs attributable to the execution of safety protocols in our stores in line with regulated requirements amounted to approximately R50 million. In spite of the lockdown, the Group has not slowed down the implementation of the turnaround plan announced at our Investor Strategy Day at the end of January. If anything, it has accelerated some of the initiatives – most particularly the cost-reset project, Group restructure into a Wholesale and Retail business units and the Game turnaround plan. We will provide a comprehensive update on the progress of the turnaround plan during the interim results presentation in August.
Liquidity and cash management
The extended Covid-19 trading restrictions intensified the daily focus on liquidity and cash flow management for the Group. Massmart has continued to meet all payment obligations to suppliers and employees as we successfully navigate through the various levels of lockdown. Our focus remains on prudent cash flow management and the implementation of strategies to improve cash generation performance through previously reported key initiatives, including negotiated rental savings, mutually beneficial commercial terms with our vendors, applying for available Tax Incentive relief measures and aggressively pursuing the cost reduction initiatives already outlined in our turnaround plan. Massmart’s balance sheet remains strong and based on our various cash flow forecast scenarios, the Massmart Group has sufficient cash facilities and resources to meet its obligations. In addition to the facility support provided by local financial institutions, the Group secured a R4 billion inter-company loan from Walmart Inc. to provide additional headroom in the event of unforeseen circumstances as we navigate through the lockdown period and beyond.
Trading statement for the 26 week period ended 28 June 2020
As referred to above, the Covid-19 lockdown has had a significant impact on trading performance. While sales and margins have been lower than the same period last year, increased focus on expense management and cost savings initiatives are bearing fruit, with expense growth expected to be contained to well below inflation. Consequently, shareholders are advised that Massmart expects, as a result of the impact of the Covid- 19 lockdown, with reasonable certainty, that the loss per share and headline loss per share, will be at least 50% or 191.1 cents per share and 182.4 cents per share respectively worse than the loss per share and headline loss per share for the same period last year of 382.2 cents per share, and 364.7 cents per share respectively. Excluding the impact of the Covid-19 lockdown, we expect the loss and headline loss would have been slightly better than the same period last year. Massmart’s financial results for the 26 weeks to June 2020 will be released on the Stock Exchange News Service of the JSE Limited on 27 August 2020.
Did you know……..
The world’s longest wedding dress had a train of almost 3km (1.85 miles) in length. Designed by a Romanian salon in 2012, the train holds a Guinness World Record, and stretched across the center of the city of Bucharest.
Dress of the Century
Meanwhile, the longest train on a wedding dress in British royal history was worn by Princess Diana at her wedding to Charles, Prince of Wales, in 1981. It featured a train of only 7.6m (25 feet).