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Footgear takes over Edgars Active and High Key

Footgear – using funds from Old Mutual Private Equity (OMPE) –has taken over the Edgars Active and High Key chain stores, divisions of the Edcon Group, and leading retailers of branded sport and lifestyle footwear, clothing and accessories. The transaction remains subject to conditions precedent, including regulatory approvals. Footgear was founded in 2001.

The acquisition, funded by growth capital provided by OMPE – the direct private equity investing arm of Old Mutual Alternative Investments – marks a significant milestone in the expansion ambitions of Footgear, propelling it to become a key player in the South African branded sport and lifestyle market.. Post the acquisition of Edgars Active and High Key, Footgear will employ more than one thousand staff members across its national store footprint.

Footgear’s offering includes an array of branded sports lifestyle and performance footwear brands, as well as outdoor, casual and leisure footwear. The offering is family orientated, servicing men, women and children and underpinned by high levels of customer service, in a unique retail experience.

Chumani Kula, investment principal at OMPE said: “Footgear’s acquisition of Edgars Active and High Key will significantly enhance the retailer’s scale and footprint across Southern Africa, effectively tripling the existing store base and on track to reaching a network of 200 stores. We look forward to supporting the management team as they roll out Footgear’s highly successful formula across all of the newly acquired stores.”

Neil Stephens, CEO of Footgear said: “The acquisition of Edgars Active and High Key represents a major landmark for Footgear, highlighting our own and our investor’s mutual confidence in Footgear’s business model and the markets in which we operate. Through this acquisition we are able to undertake the next steps in our expansion plans, supported by an enabling partnership with a market-leading private equity firm like OMPE.”  F2F

Hi-viz – glowgear sun shade hat youtube presentation

The Foschini Group – the notable exception in SA

By Amelia Morgenrood

The Investment Analyst Society recently presented an Analysts Masterclass with an emphasis on the retail and consumer goods sector of the JSE. Much insight was provided by veteran analysts Syd Vianello and Chris Gilmour, featured on the panel discussion. They unpacked several topics like the size and diversity of the sector, the impact of foreign players, consumer behaviour, and retail companies venturing offshore, and notably into Australia, often terminating these ventures in the graveyard.

Early 2018 retail stocks had a rally on the JSE, and share prices rose substantially thanks to the momentum created by Cyril Ramaphosa’s ascent to the presidency. The gains started in November 2017, when the market began to price in the expected positive political changes. Ever since it lost steam and investor demand faded away. Traditionally offshore investors favoured retail stocks, but statistics show foreign investors remaining net seller of the JSE to the value of R37 billion. The South African economy is experiencing the most prolonged downturn since 1945, and for the retail sector, this is the worst situation ever. They are stuck in a low growth environment, and there are few exceptions, so far the only one unscathed is The Foschini Group (TFG).

It does not seem like the retail environment will get much easier soon, with households under immense pressure from higher taxes, higher petrol price, unemployment, high debt levels, and low confidence levels. Everybody expected a consistent improvement after the election, but this did not materialise. In a low inflation environment, the food retailers’ margins come under pressure, and their opportunity for high stock profits disappear.

Online shopping threatens the traditional retailers in the developed markets, but it doesn’t seem to be a real threat in South Africa and the rest of Africa yet. It varies from country to country; in South Africa, it is still a low 2 to 3 percent of retail sales while it is for example, much higher in the UK closer to 30 percent. In Africa, there are delivery issues, and the traditional shopping centre is not as much under threat as in the developed world. Even when Stuttafords blew up, it didn’t take long for all the space to be filled up by smaller retailers and pop-up shops. In the UK, USA, and Europe it is different; shopping will decrease dramatically in the future, and there is a vast oversupply of retail space.

The South African landscape changed in the last couple of years and quite a few of the global brands have already left. Some came in on a franchise basis, but they didn’t make it. The franchise mark-up, import duties and margin for the retailer made the clothes too expensive. There is just too much competition in South Africa.

For many years retailers were boosted by the up and coming middle class and ever-increasing social grants, but the growth in both are questionable for the foreseeable future.

Foreign investors used to love SA retailers because we have world-class management and high-profit margins, not necessarily found in other emerging markets, but are management still considered to be good?

The question is probably yes to retailers like Mr Price, PicknPay, and TFG.

Amelia Morgenrood is a PSG Wealth financial adviser based in Pretoria.  Fastmoving

The New York Runway comes to SA in October

Alongside Runway Prestige New York, Red Carpet Creative is bringing a select number of New York Fashion Week designers to South Africa. The designers will present their ready-to-wear and haute couture collections at the Cape Town Marriott Hotel Crystal Towers on 11 October 2019.

“We are beyond excited for this sublime collaboration of SA-NYC; transcending borders and breaking boundaries, we lift the curtain and unveil the best of the world’s culture capitals,” says Jade Allen of Red Carpet Creative.

“Runway Prestige is based on the vision of unity and exclusivity,” explains Rabab Abdalla, founder and executive producer of Runway Prestige New York.

“We believe in fostering a space of tolerance and respect whilst cultivating and encouraging our fashion designers’ creativity and cross-cultural fashion exploration. We are extremely excited to bring our New York fashion production to South Africa. We aim to empower designers to explore other ecosystems of production and distribution. We are transcending geographical boundaries and creating an open platform for designers to be inspired by other cultural fashion history, trends and expression.”

South African haute couture designer Jacques LaGrange says: “Having worked with NYFW for the past three years consecutively, I can confidently say that South Africa is right up there in terms of vision and quality. The cross-pollination of NY and SA makes perfect sense in the world of fashion and gives people something truly spectacular to look forward to and be a part of!”   Bizcommunity

Did you know……..

1930s Fashion: What did people wear?

Even though people were broke in the 1930s they still didn’t dress like it.

Men still dressed up nice, sporting fedoras and double-breasted overcoats. The boys wore short shorts and tall socks.

The women wore dresses and kept their hair close to their head. Fur was in and so were floral patterns. Makeup was chic and shoulder pads were very important until the late 1930s.