26 of 2022

                              Newsletter No 26/15 July 2022                                 


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Pandemic breathes new life into craftcore

By Sandiso Ngubane

JW Anderson’s viral #HarryStylesCardigan
Image: JW Anderson

How a homespun fashion trend can inspire a redefinition of luxury

There’s a white doily crochet pattern shirt hanging in my closet, right next to a multicoloured crochet crew neck top; both of which I have barely worn since purchasing them towards the end of last winter. I knew then that the crochet trend — one of the most talked about in fashion at present — was a thing, but had I looked even more closely I would have come to realise that it’s not merely another fashion trend. It’s one that has the potential to change perceptions about what constitutes luxury.

Crochet is an aspect of a trend that’s come to be known as “craftcore”. It’s one that also includes hand-knits, macramé, tapestries, tie-dye, quilting, and other traditional, homey techniques that have inspired a movement of sorts.

As early as 2020, a deluge of craft-based content began springing up on all corners of social media — YouTube, Tik Tok, Instagram, you name it. Crocheting and knitting had somehow shed the stereotype as a hobby for senior citizens, becoming a fad for younger generations, sharing the hobbies they were picking up as we were all locked away in our homes due to governments around the world ordering Covid lockdowns.

Remember that banana bread you were making during level 5 lockdown? That Udemy knitting class you soon abandoned? Well, you’re one of millions around the world who were using their hands to make stuff, and for many designers — and now brands — this rediscovery of handcrafting inspired a shift in perspective, making craftcore the huge trans-seasonal trend it has become.

A simple search for key words related to the trend brings up a slew of small brands that sprang up in this time but I would be remiss if I did not note that some, like SA’s very own Subtle-T, had already been exploring crochets ahead of the pandemic. Subtle-T’s “Hues of the Desert” range, showcased at African Fashion International’s Joburg Fashion Week in 2018, is a case in point.

Back in May 2020, Ella Emhoff, model and stepdaughter of US vice-president Kamala Harris shared a post on Instagram wearing a crochet hat. About a year later, she launched a three-piece limited edition collection with womenswear brand Batsheva. Delsy Gouw’s Memorial Day crochet brand emerged as a favourite of Emhoff’s and other celebrities.

High-end designers and brands tapping into the craftcore movement include JW Anderson, whose patchwork cardigan worn by Harry Styles ignited TikTok mania, leading the brand to post a “Harry Styles cardigan knitting tutorial” YouTube video.

In March 2022 we reported French luxury brand Chloe’s embrace of artisanal craft under the creative direction of Gabriella Hearst, who notes that “this thing we call luxury has become overindustiralised”. Locally, brands like Viviers, Uni Form, MaXhosa and others have long been championing a craft-based sensibility. In Uni Form’s case, specifically, this involves working with rural craft communities — an important tent of sustainability.

The nature of trends is such that many are fleeting, but some represent tectonic shifts — critical changes in the global environment. The pandemic represents such a moment, so it’s quite unsurprising that some of the trends that came about during this time may have staying power. I would argue that craftcore is one of them, and the next few years — or seasons at the very least — will demonstrate the many innovative ways in which designers and brands are going to incorporate the trend and perhaps encourage a rethink of how we define luxury.

As the craftcore trend also coincides with an increasingly important question of sustainability for younger consumers seeking out brands that value a conscious approach to production, a slow approach to production that handmade, homespun trends like craftcore inspire, may trigger a reset. It’s an ideal environment for artisanal, made-to-order design to thrive.  

A successful future starts today 

Dear reader,

Since founding, Brother has been grasping changes in customer needs and innovating its business to solve social issues. Creating work for people wishing to work, as well as the construction of factories with pleasant working atmospheres have been two of the spirits of our foundation.
Starting in 1908, as a repair workshop for sewing machines, Brother expanded its business to different areas. The first Brother made sewing machines have been designed and released between 1928 and 1936. After this we started to develop, among other things, alphabetical typewriters, machines for office printing, CNC cutting, and garment printing.

Looking back, we can be very proud about our process and the healthy way our company grew. Besides releasing new products, it must not be neglected to keep the quality of after sales service, level of customer satisfaction, and to respect our environmental and social responsibilities.
After being listed in the last years in different Forbes rankings, such as “Top Regarded Companies”, “Top Multinational Performers”, “World´s Best Employers” and “World´s Top Female-Friendly Companies”, this approvals from independent sources, give us confirmation and motivate us to extend our social activities in all different fields.

Besides the development process of our “Brother Vision 2050”, which is defining our targets until year 2050, to reach among other things, carbon neutrality and to maximize the resource circulation, we are also continuously working on our machinery solutions as you can imagine.

To continue our good standing in the apparel industry, we release our new single needle- and overlock machines, which will be introduced into the market step by step.
Besides sewing, we also released our new Bonding machine BM-2000.
Brothers Innovative Seam Construction (ISC) joins two pieces of fabric by applying liquid glue between the two layers. Ensuring high washability, elasticity and strength, this new technology brings new value to all different kinds of garment like sports- or underwear.

Next to our developments for the apparel industry, we are also working on enlarging our machine range for the heavy-duty industry like automotive interior, leather bags or upholstery.
By developing our BAS range continuously, and releasing our new Unison Feed series, we not only corroborate, but also expand our standing in the field.

Hoping that the situation of the pandemic will remain to stay humble, and even get better, we are looking forward to meeting you very soon. In our office, in your company, at local events, or at one of the exhibitions we will exhibit at next, like SIMAC Milan in September, or ISPO in Munich end of November.
Combining innovative and reliable machine developments with our world known after sales service and our contribution to make the world a better place, by reducing our CO2 emissions, and supporting different social activities worldwide, are the values we stand for.
Everyday. At your side.

Jörg Haan
Managing Director

Mr Price: Worthy of your attention?

By Jordan Theron

The red hat is a familiar sight in South African clothing retail. Mr Price has been on a major acquisition spree recently, so the company is on the radar of investors (and I entered a long position based on recent share price weakness as well). The release of Mr Price’s integrated annual report gave Ghost Grad Jordan Theron a good reason to dig in.

Since its first store opened in 1987, Mr Price has won the hearts of many South Africans. This has been further cemented by their reputation for great value and sponsorship of various sporting events and teams such as the Comrades and Team South Africa at the 2021 Tokyo Olympics.

The share price itself is in need of some sponsorship, down 13.3% over the past year:

A podium-worthy CAGR

Feel-good sponsorships aside, this is a serious business and Mr Price has produced a 36-year sales CAGR (Compound Annual Growth Rate) of 17.5%. This is a remarkable performance, particularly over such a long period. If the US market wasn’t on fire right now, this kind of growth rate would even get US growth investors excited!

I had to dig deep into the investor relations sections of the websites to find this information: Truworths has achieved a 19-year sales CAGR of 15.3% and The Foschini Group has managed 13.2% over a 17-year period. These obviously aren’t directly comparable to the period given by Mr Price, but it’s still interesting to compare them.

Mr Price is hugely popular among shoppers

Over 3 months, Mr Price’s resonance with customers drove customer engagement to such a level that the group is the most shopped fashion retailer in the country, with 5.7 million shoppers. With approximately 35% of South Africa’s population living in rural areas where even Mr Price may not have a presence, this is a particularly impressive statistic in terms of share of (realistic) total addressable market.

Clothes, yes, but also cellphones

The financial services and telecoms segment at Mr Price grew operating profit by 85% in the last financial year. Although this segment may be small, the cellular side of the business grew by 32%. In years gone by, the cellular division barely got mentioned in annual reports.

These days, investors know that clothing retailers have tapped into the lucrative cellphone market. It’s all about having an attractive retail footprint and enough trust from customers to bring them additional products.

Second only to Takealot

Mr Price makes wonderful profits and Takealot still doesn’t. In fact, Takealot even made a loss during the pandemic, which was surely a golden period for online shopping. If you think that Takealot operates in a competitive vacuum and that profits are guaranteed to come, think again.

Mr Price has moved strongly into the online space through capital investments and acquisitions. The group’s share of online traffic is 13.3%, which is second only to Takealot among omni-channel and pure-play retailers. This puts Mr Price ahead of Woolworths and The Foschini Group.

Moving along the LSM curve

In South African retail, a group like Shoprite has shown us the value of operating throughout the LSM curve (i.e. having lower-income and higher-income store formats). Mr Price has made a strong move into the premium market segment, which we know is lucrative in this country.

Mr Price agreed to acquire a 70% stake in Blue Falcon, which owns the Studio 88 Group, from RMB Holdings for R3.3 billion. The deal was announced in mid-April. This is a strategic move to “buy” market share in the more premium and ever-expanding Athleisure segment. Studio 88 is South Africa’s largest independent retailer of branded leisure, lifestyle and sporting apparel, with footwear also included under their umbrella.

Riots, unrest and unhappy things

An assessment of Mr Price wouldn’t be complete without a look at how the group handled the period of despair in 2021 when riots broke out mainly in KwaZulu-Natal. This is the province in which Mr Price has its primary distribution centre.

The riots resulted in 539 stores temporarily closing during that week and 111 remaining closed due to damage. There were 96 stores reopened by end of the 2022 financial year, with five reopening in 2023 and ten in 2024.

After enduring this disaster, Mr Price received R296 million from SASRIA for stock, cash, and fixed asset losses as well as R92 million in business interruption insurance which somewhat mitigated the negative impact.

The future

It’s easy to be pessimistic about South Africa. Mr Price thankfully doesn’t feel that way and is ambitiously growing in the local market, through a combination of acquisitions and organic initiatives.

It’s always a risky strategy, as acquisitions are notoriously difficult to integrate and companies tend to overpay for businesses that they want. Only time will tell how this plays out.

Over the past 10 years, Mr Price has only delivered a share price CAGR of 4.1% which is disappointing. With a goal to become Africa’s largest retailer, could the next 10 years will look different?

Do your own research and decide for yourself!    Moments

Woolies – appointment of lead independent director

Ms Nombulelo (Pinky) Moholi, currently an Independent Non-Executive Director, has been appointed as the Lead Independent Director of the Board with effect from 7 July 2022.

Largest fashion retail store

The largest fashion retail store measures 14,761 m² (158,892 ft²), achieved by Primark Stores Ltd. (UK) at Birmingham Pavillions in Birmingham, West Midlands, UK, as verified on 5 April 2019.

For the purposes of this record, a fashion retail store is defined as an establishment/building which primarily sells clothing, accessories and other wearable garments and equipment.

 Click here to see fact sheet with advertising rates. 

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