26 of 2020

head
                                                                                                              

                                                              Newsletter No. 26 / 17 July 2020                             

Click on any ad to go to the advertisers website..

Cotton Industry Stakeholders

By Tanya Aucamp


7 October, commemorates World Cotton Day and aims to celebrate the global importance of cotton! Even if this date might seem to be far, Cotton SA with the ICAC is calling on every stakeholder in the global cotton supply chain – governments, national and international associations, NGOs, private sector businesses and individuals – to celebrate World Cotton Day in whatever way they feel is most appropriate.

Cotton SA would specifically like to call on all our local industry partners
to join us on this day to educate target audiences on the many advantages of cotton – from its qualities as a natural fibre to the many benefits people obtain from its production, transformation, trade and consumption around the world.

One of the most important aspects of World Cotton Day is that it’s unique to every country and culture. The important question in planning your event will be “What does cotton mean to YOU (business and individual), your family, and your country?” There are countless ways people can show their support for the world’s most natural fibre.

To guide your thoughts Cotton SA, within the guidelines from ICAC, have listed some ideas:

*    KEY EVENT: A media partnership intervention with the National Press Club, the National Agriculture Writers Association, and other media partners – social gathering (if possible) linked to a virtual broadcast platform.
Value chain panel discussion with Q&A opportunity + video clips of various virtual tours from field to fashion.

Other:

*    Photo competitions of cotton and related products – from farm to fashion
*    Growers can arrange farm tours, complete with rides on the various equipment used in the production of cotton (also an opportunity for equipment service providers)
*    Ginners, spinners and textile manufacturers can arrange site visit tours (also virtual tours)
*    Awareness and educational information about cotton, from agriculture to fashion – working closely with the department  of education    to customise the marketing material aligned to the school curriculums.
*    Focused interviews with ‘Cotton Value Chain Experts’
*    Brands and retailers can serve cotton candy in their stores and hold special sales for cotton products
*    Display the other types of other non-fibre products made from cotton:
*    Cleaning wipes, cotton buds, cotton wool, hygienic products, etc.
*    Cosmetics, shampoo, etc.
*    Adhesives, mops, dishtowels, and many other items

Please respond to tanya.aucamp@gmail.com, indicating your willingness to partner with Cotton SA (joining ideas and resources) to create a cotton buzz as we build up to the ultimate burst on 7 October 2020.

Based on the feed from interested parties I will set up a virtual meeting to discuss some details. It would be good if we could have an integrated look and feel for the South African campaign even with each entity promoting their own event. It is important to start immediately to promote the initiative and engage local and national media in advance to ensure maximum exposure for cotton’s benefit.  #WorldCottonDay #sacotton #cottonsa #sacc

Please feel free to share this email with any other industry stakeholders who you believe would be interested in joining in this initiative.

Your inputs and ideas towards planning a unique South African – World Cotton Day is appreciated. Cotton SA

Edcon BRPs accept TFG’s conditional offer to buy 371 Jet stores

By Dineo Faku

The Foschini Group (TFG) on Monday announced plans to buy 371 Jet stores from Edcon for R480 million, signalling its extension into discount retail clothing and footwear.

TFG chief executive Anthony Thunström told investors that Edcon’s business rescue practitioners had accepted its conditional offer to acquire certain commercially viable stores and selected assets of the Jet stores.

“The proposed transaction enables TFG to acquire selected parts of the Jet business, a unique opportunity which previously was not possible and is expected to give TFG significant scale at an attractive price,” said Thunström.

He said the transaction provided the group with structural risk mitigation and established a value retail pillar for the TFG business that would be costly and difficult to replicate organically.

He said the proposed transaction was subject to customary conditions precedent, including the renegotiation of store leases, requisite transitional services arrangements being agreed, TFG board approval and the approval by the relevant regulatory authorities.

“The proposed transaction will also include the transfer of selected key executives and staff of Jet to ensure sufficient management capacity and continuity to deliver on the current turnaround plan for Jet and discussions are well advanced in terms of a proposed transition plan,” he said.

Jet has carved out a niche as a fashion retailer focused on selling affordable clothing, shoes, accessories, beauty, home-ware and cellular products.

Founded in 1976, Jet competes with Pep, Ackermans and Mr Price.

Last month, Thunström said during the TFG’s annual financial results that Edgars stores were the opposite of the group’s business model, and  Jet was the most attractive part of the Edcon operations.

Edcon’s business rescue practitioners are selling Edgars, Jet and Edcon’s rewards programme, Thank U, after the company failed to attract a capital injection from investors. The business rescue practitioners also announced earlier this month that it had signed an agreement to sell parts of Edgars to fashion retailer Retailability.

Edcon, the 91-year-old fashion and beauty retailer, filed for voluntary business rescue earlier in late April.

The practitioners yesterday welcomed the TFG bid.

“TFG is uniquely placed in terms of this niche market, infrastructure, and current leadership expertise to positively position the Jet business within its target markets and drive the business forward,” they said. “Jet’s scalable business model with scope for further market share and growth ensures its sustainability as an established South African brand. There is alignment between TFG’s product and value offerings with the current brand and value offering of Jet.”

The SA Commercial, Catering and Allied Workers Union (Saccawu), which represents the majority of organised labour at Edcon, also welcomed the proposed acquisition.

The union’s national co-ordinator, Mike Sikani, said the TFG acquisition signalled job security for Jet employees. “Saccawu is encouraged that TFG has declared interest to take over 371 certain Jet stores. This is news that we need to welcome. We knew that 466 stores of Edcon are viable that can be saved and continue to operate. We know of 53 worst-performing Edcon stores. The offer for 371 stores should be seen in the light of ensuring job security,” said Sikani.

Unum Capital’s joint head of trading, Michael Porter, said the bid came as no surprise.

Porter said there was always speculation that one of the retailers would pick up Jet. “This now gives TFG an opportunity to acquire Jet without taking any ‘bad businesses’ with it out of the Edcon group,” Porter said.  IOL

SACTWU to fight for RSA workers’ COVID-19 relief payouts

Based on a snap survey, SACTWU recently expressed deep concern over the possibility of thousands of clothing, textile, footwear and leather industry workers missing out on Unemployment Insurance Fund (UIF) Coronavirus Temporary Employer-Employee Relief Scheme (COVID-19) payments

The survey was urgently completed in anticipation that the UIF might soon announce a closure date for April 2020 UIF relief fund applications. The UIF has recently publically indicated its desire to do so to bring more certainty to the quantum of claims still to be processed, according to a press release from SACTWU.

Our snap survey shows that employers from about 300 workplaces in the industry, jointly employing about 7 500 workers, might not have applied for UIF COVID-19 relief funding at all. These are mainly smaller enterprises but which nevertheless, combined, employ thousands of workers.

The trade union will now directly approach these employers to ascertain the exact reasons why many of them have failed to make the necessary applications for UIF relief funding on behalf of their employees. It will be a complete disaster if several thousands of workers miss out on what is rightly due to them, simply because a few employers are not doing what they are required by law to do.

This problem is compounded by the fact that many workers are already expressing deep concerns about very serious delays in the receipt of UIF payments and, in some instances, incorrect payments, the trade body said.

Over the next few days, SACTWU will intensify its efforts to ensure that every qualifying company in our industry has actually applied for UIF COVID-19 TERS relief funding, for their workers. F2F

Recruitment….

Leading textiles wholesaler in Cape Town has an opening for a general manager.

 Successful applicant must have industry and textile knowledge.

Ability to deal at the highest level with retail and manufacturing buyers.

Manage a dynamic sales and sourcing team.

Merchandising and sourcing skills essential.

CV’s to paul@sktextiles.co.za

TFG – trading update and potential acquisitions

As previously announced on SENS on 15 May 2020 and 18 June 2020, the impact of the global COVID-19 pandemic has been felt across all of our operations since the beginning of March 2020. It had a significant effect on our businesses and on retail turnover for the three months ended 27 June 2020. Scenario planning continues to be critical to our forward planning.

Trading update for the three months ended 27 June 2020

The Group’s consolidated retail turnover declined 43.0% for the three months ended 27 June 2020 when compared to the same period in the previous financial year, with significant trading disruptions caused by Government-enforced lockdowns and regulations on social distancing in all three of our major operating territories – South Africa, the United Kingdom and Australia. The global economic environment remains constrained and consumers continue to experience significant economic pressure.

TFG Africa

TFG Africa’s retail turnover declined 38.4% for the three months ended 27 June 2020 when compared to the same period in the previous financial year, predominantly as a result of all TFG Africa’s South African operations being closed from 27 March 2020 to 30 April 2020. c.80% of the stores re-opened from 1 May 2020, with all stores adhering to strict COVID-19 safety protocols. Performance was strong in May and TFG Africa achieved retail turnover growth of 0.6% compared to the same period in the previous financial year, notwithstanding the fact that 447 jewellery stores were still closed during the month due to the prevailing lockdown restrictions. Excluding the jewellery stores, retail turnover growth in May was up 7.9%^ compared to the previous financial year. All TFG Africa stores re-opened from 1 June 2020 with trading more subdued in the month of June (retail turnover declined 13.8% compared to the same period in the previous financial year) with lower levels of footfall observed in the regional shopping centres.

^ Pro forma management account numbers used to calculate an indicative retail turnover growth.

For the three months ended 27 June 2020, cash retail turnover declined 31.8% when compared to the same period in the previous financial year. E-commerce retail turnover growth for the period was significantly stronger than expected at 109.8% compared to the same period in the previous financial year, contributing 5.0% to total retail turnover for the period.

TFG Africa credit

A conservative credit appetite and restricted approval criteria remain in place. Credit retail turnover contracted by 47.1% for the three months ended 27 June 2020 compared to the same period in the previous financial year. As previously announced on SENS on 15 May 2020, cash collections in respect of our debtors’ book were strong in the month of May, the month from which customers could again make account payments in our stores and as a result of customers continuing to adopt the electronic and other alternative payment channels made available to them.

For the 3 months ended 27 June 2020, cash collections were above expectation but still down on the same period in the previous financial year.

TFG London

TFG London’s pound sterling-denominated retail turnover declined 68.5% for the three months ended 27 June 2020 when compared to the same period in the previous financial year, against the backdrop of a disrupted environment, characterised by Government-enforced lockdowns that temporarily prevented all physical store and concession sales in almost all of TFG London’s UK, European and Rest of the World operations. The store and concession estate gradually re- opened during May and June (in the UK from 15 June 2020), albeit with significantly lower than usual levels of footfall across all markets, particularly in central London and commuter locations which rely on public transport, as well as on office and tourist trade, both of which are yet to return. TFG London’s own branded websites traded up 2.4% in the quarter compared to the same period in the previous financial year, supported by strong sales of casual clothing. 3rd party online channels were however weaker, driving an overall reduction in total e-commerce pound sterling denominated retail turnover of 21.2% for the period when compared to the same period in the previous financial year.

TFG Australia

TFG Australia’s Australian dollar-denominated retail turnover declined 42.4% for the three months ended 27 June 2020 when compared to the same period in the previous financial year. All stores were closed on 27 March 2020 in response to Government restrictions and regulations on social distancing and the re-opening of outlets commenced in April, with all outlets re-opened by the end of May. Trade has been impacted by individual States having different levels of restrictions based on the number of active COVID-19 cases and recently, the Victorian Government announced a lockdown (in parts of the State) due to indications of a second wave of infections, although stores are expected to remain open on minimum rosters. E-commerce retail turnover growth for the three months ended 27 June 2020 was strong in Australian dollar terms at 74.0% when compared to the same period in the previous financial year.

Strategic initiatives in dealing with COVID-19 Update

The COVID-19 pandemic remains dynamic and continues to evolve at different stages throughout the jurisdictions within which we operate. We are adapting our business as effectively as possible to deal with the dynamic environment within which we operate, with the aim of creating long term value for our staff, customers and shareholders. As previously announced, we have accessed Government funding, where available to us, in each of our territories of operation. We also continue to prioritize cost savings initiatives across all our operations and our business optimization initiatives in TFG Africa.

Submission of conditional offer to acquire selected JET stores and related assets

On 10 July 2020, TFG submitted a conditional offer to acquire certain commercially viable stores and selected assets of JET, a division of Edcon Limited (“Edcon”) for a cash purchase consideration of R480 million (“Proposed Transaction”). Edcon is currently in business rescue in terms of the Companies Act. Edcon’s business rescue practitioners have accepted the terms of TFG’s conditional offer. TFG has been granted exclusivity to negotiate and finalise

the terms and conclude the Proposed Transaction.

JET is a leading Southern African retailer (by brand recognition and market share) and would provide TFG with a strategically important expansion into the value segment of the Southern African retail apparel market. The Proposed Transaction enables TFG to acquire selected parts of the JET business, a unique opportunity which previously was not possible and is expected to give TFG significant scale at an attractive price. The transaction construct provides TFG with structural risk mitigants, as detailed below, and establishes a value retail pillar for the TFG business that would be costly and difficult to replicate organically. The Proposed Transaction will also include the transfer of selected key executives and staff of JET to ensure sufficient management capacity and continuity to deliver on the current turnaround plan for JET and discussions are well advanced in terms of a proposed transition plan.

TFG’s conditional offer envisages:

*the acquisition of the JET brand;

*the assumption of a minimum of 371 commercially viable JET stores (“Commercially Viable Stores”). Included in the Commercially Viable Stores, is a distribution centre located in Durban, South Africa and certain stores in Botswana, Lesotho, Namibia and Eswatini;
*the acquisition of the associated property, plant and equipment for the Commercially Viable Stores and the Durban distribution centre;

*the acquisition of the rights in and to the JET Club; and

*all existing stock holdings with a minimum stock value of no less than R800 million (“Minimum Stock Value”). In the event that value of the stock on hand is less than the Minimum Stock Value at the closing date, TFG will proportionately adjust the purchase consideration by the percentage by which the actual stock value is less than the Minimum Stock Value.

As part of the conditional offer, TFG will assume the operational commitments associated with the Commercially Viable Stores only, such as employee and lease commitments, albeit on a renegotiated basis. Certain head office staff and functions will also be assumed. TFG is finalising its assessment of the capital requirements of the business and currently does not believe this would result in a significant change in the capital requirements for the overall TFG Group.

TFG are actively engaging with the business rescue practitioners and other key stakeholders in order to progress to a binding offer on an accelerated basis. The Proposed Transaction is subject to customary conditions precedent for a transaction of this nature, including amongst others, the renegotiation of store leases, requisite transitional services arrangements being agreed, TFG Board approval and the approval by the relevant regulatory authorities.

TFG does not anticipate that the Proposed Transaction will be a categorised transaction in terms of the Listings Requirements of the JSE Ltd. TFG will keep shareholders informed of developments relating to the Proposed Transaction.

Update on the proposed Rights Offer

Further to the SENS announcement issued by the Company on 18 June 2020 in relation to, amongst other things, the proposed fully underwritten renounceable rights offer by the Company (“Rights Offer”) and the convening of an extraordinary general meeting of TFG shareholders to be held on 16 July 2020 to approve matters relating to implementation of the Rights Offer (“EGM”), shareholders are advised that the Company is in the process of finalising the circular to shareholders in relation to the Rights Offer (“Circular”) and has today submitted the Circular to the JSE for formal approval. Subject to certain conditions, including the adoption of the resolutions by the requisite majority of TFG shareholders at the EGM, the Company expects to be in position to proceed with Rights Offer and publication of the Circular as soon as practicable following the EGM.

Annual general meeting

Shareholders are referred to the market notice issued by the Financial Services Conduct Authority (“FSCA”) and communicated by the JSE on 3 April 2020, granting an extension of financial reporting periods and are advised that the Company will be utilising the two-month extension period afforded to issuers in that notice.

The Company’s financial year-end was 31 March 2020. Accordingly, in the normal course, the Company would have been required to distribute its audited annual financial statements together with the notice of annual general meeting (“AGM”) to shareholders by no later than 31 July 2020.

Management is in the process of finalising these documents and will publish them, along with the integrated annual report by no later than 31 August 2020 and shareholders will be notified via SENS.

Did you know……..

Gluttons for Punishment

Of course, women have often suffered from effects of fashionable but restrictive clothing more than men. Take corsets, designed to accentuate a woman’s silhouette by pinching in the waist and forcing the hips backwards. Corsets restricted breathing, broke ribs, and could cause damage to internal organs, as waists were cinched to as little as 13 inches. They caused injuries to women’s hips and spine, and compression of the lungs meant that fainting was a common occurrence.

To Advertise…..   Click here to see fact sheet with advertising rates. 

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: