Newsletter No 23 /27 June 2025

Click on any ad to go to the advertisers website

To agents, manufacturers, distributors & wholesalers.  Please upgrade your 1 line listing to a business listing at least.  The Sourcing Directory and Newsletter is dependent on industry support and your business listing offers potential clients more information about your company, products, branches, agents etc. 

The cost of a business listing for the entire year is only R1400.

To add a logo is an additional R440.    carla@newsbriefs.co.za                           

 Pepkor warms up with more layers

By The Finance Ghost

Picture: The Sunday Times/Alaister Russell

Credit sales are boosting growth, but just as significant is the retailer’s dealmaking

The “credit interoperability strategy” at Pepkor is quite a mouthful. It’s also an exciting part of the business, driving credit sales across multiple business lines and product categories. From cellular to clothing, Pepkor is using credit sales as a growth engine.

As interesting as this is, there’s an argument to be made that it overshadows the significant recent dealmaking at the group and the strides it is making in how it is positioning its traditional retail offering.

The credit strategy only works if there are products people want to buy. As Pepkor improves and broadens its offering, the seeds it has planted in credit sales should blossom. The innovative DNA that permeates the fintech offering — for example, credit enablement and value-added services in the informal market — is therefore only one part of the story. It’s crucial that Pepkor also gets the basics right across its various retail brands.

A simple offering doesn’t necessarily create a simple business. Even though a chain such as Ackermans is focused on basics, it still got things wrong in 2024 and Pepkor ended up recognising substantial impairments. Fortunately, there was a strong recovery in that business in the six months to March 2025.

Speaking of Ackermans, evidence of Pepkor’s strategy to win more market share in clothing for adults (on which it is underindexed, while being overindexed on childrenswear) is the rebranding and repositioning of Ackermans Woman as Ayana. It has the likes of Zara firmly in its sights here, targeting mid- to upper-income shoppers with a range that is updated more frequently than would be the case in Pepkor’s traditional basics-focused offering. It’s still very early days, with the launch of the brand through 32 revamped stores in February. Keep an eye on this.

To add to organic initiatives in which Pepkor is optimising and tweaking what it already has, the group is also busy with substantial acquisitions. In March, Pepkor announced the acquisition of several brands from Retailability, the group that acquired Edgars out of business rescue (you may recall that Jet, the other major part of Edcon, went to TFG).

Retailability is disposing of Legit, Style, Swagga and Boardmans to Pepkor, leaving it with Edgars, Edgars Beauty, Kelso and Keedo. The acquired brands will sit in Pepkor Speciality, adding scale to that business and giving it the opportunity to rationalise brands and distribution. Importantly, this acquisition is well in line with the broader discount and value model that Pepkor has been built around.

If you can believe it, there’s more in terms of deals — the acquisition of Choice Clothing, announced in November 2024, was concluded in May. It will have been implemented by the time you read this. This is an off-price model, which means highly opportunistic buying of surplus product in the market and an ever-changing range. This is a totally different type of supply chain from the less fashion-focused offerings such as Pep, so Choice is being kept separate within the group to avoid it losing its entrepreneurial edge in its buying strategy.

Pepkor is clearly on a growth trajectory, with the layering of the credit strategy on top of these chains. With local retailers currently telling a story of strength in credit books and strong demand from consumers (Lewis is another prime example right now), this positions Pepkor favourably.

The first half of the year was an excellent foundation for the financial year, with headline earnings per share up 12.4% without adjustments, or 18.9% on a normalised basis allowing for a lower effective tax rate in the previous year. It is seeing solid growth across the segments, with gross profit margin also picking up thanks to the higher mix of fintech revenue.

The blemish on the numbers is Avenida, where like-for-like sales dipped 1.8% on a constant currency basis. Total sales growth of 12.1% (driven by new store openings) is flattering the Avenida story, as there are issues in the underlying business. There are a number of management interventions taking place here, with Pepkor having now increased its stake in the Brazilian business to 94.75%.

Overall, Pepkor is looking strong at the moment. It has a compelling story across elements such as online and credit sales. The fintech business is effective and ready to be rolled out across incoming stores. Perhaps best of all, the only offshore exposure right now is Avenida, which is small in the group context.

Pepkor has seen what so many others have failed to recognise: there’s still a significant growth opportunity right here in South Africa.   

Swedish textile recycler to partner with Gap, Target

By Greta Rosen Fondahn

Picture: 123RF/Chris Putnam

Syre to provide recycled polyester as demand for sustainable clothing grows

Stockholm — H&M-backed textile recycling firm Syre will provide recycled polyester to US retailers Gap and Target, it said on Tuesday, as demand for sustainable fashion grows.

Several start-ups are developing technologies to recycle discarded clothes into new textiles amid increasing consumer demand, and with retailers keen to burnish their sustainability credentials and meet tougher regulations.

Syre, which was cofounded by fast-fashion retailer H&M and investment group Vargas, plans to produce more than 3-million tonnes of polyester in 2032 by recycling used garments. It entered a long-term agreement with H&M last year worth a $600m over seven years.

Gap wanted to use 10,000 tonnes a year of its polyester chip, while Target would incorporate recycled polyester into a “selection” of the company’s products, Syre said in a statement.

“We will co-develop circular polyester together and it will lead to a commercial agreement over time,” Syre CEO Dennis Nobelius said. He did not disclose the potential monetary value of any agreement or a time frame.

Syre produces a polyester chip which then needs to be spun into a thread by its partner companies.

“This partnership enables us to accelerate our progress towards realising a more circular fashion industry,” Gap vice-president of global sustainability Dan Fibiger said in the joint statement.

Last year, Syre raised $100m in a funding round to build a “blueprint” factory in the US state of North Carolina and prepare for two more plants, including one in Vietnam.

The US factory is expected to have a capacity of up to 10,000 tonnes of recycled polyester annually and become operational during 2026, while Syre aims to start construction on the Vietnam plant in 2027 to produce 150,000-250,000 tonnes of polyester, Nobelius said.

Sweden-based sportswear company Houdini has also committed to source 50% of its polyester from Syre for a three-year period, Syre said.    Reuters

Only Natural 2025 Student Design Competition

– Enter Only Natural 2025 and your work could be featured at Material Matters London – Entrants challenged to use only natural materials to design a fashion or home piece – Competition closes 30 June. Enter Here

It’s the last call for entries to the Only Natural 2025 Student Design Competition, the international programme challenging the next generation of designers to put nature first – reimagining the future of fashion and home design through the exclusive use of sustainable, natural materials.

 This year, winners will be showcased at the Material Matters London during London Design Festival, giving students the chance to see their work exhibited alongside some of the most innovative names in sustainable design. The winners will be revealed on 16 September, during the preview evening of Material Matters London at its new home at Space House.
 

Only Natural is backed by trade bodies representing natural fibres including the Leather & Hide Council of America, American Wool Council, American Hardwood Export Council, National Industrial Hemp Council, Mohair Council of America, and American Softwoods. Entrants are invited to submit work in one of two categories: Fashion (Apparel, Footwear, Accessories) or Home (Furniture, Interiors). Each submission must incorporate at least two natural materials such as leather, wool, wood, cotton or hemp – no synthetics or plastic-based components are allowed.
     

The Only Natural competition is open for entries Here. Closing date for entries: 30 June 2025.    S&V

Wardrobe Malfunctions

Theo Wargo / Getty Images for Huffington Post

The little zipper on Kylie Jenner’s Alexander Wang dress at the 2018 Met Gala was a controversial fashion choice, but it turns out, it wasn’t actually supposed to be part of the look in the first place! In a 2020 Instagram story post, she said, “This dress wasn’t supposed to have a zipper but it ripped as I was squeezing into it, so we added it on the way out the door.”

Editorial Submission:

Please remember to send me your news so that we can share it with all our readers in the weekly newsletter. Although editorial is neither guaranteed nor implied, suitable editorial for consideration may be submitted to:-