33 0f 2021

                      Newsletter No 33 / 3 September 2021                           

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50 NOT OUT: From clerk to CEO: The inspirational story of John Jacobs

From Clerk to CEO: The proudly South African story of John Jacobs

From a teenage junior clerk at an international protective workwear company to taking over that very business and turning it into one of South Africa’s most prominent ventures of its kind: That is the story of John Jacobs, CEO of Sweet-Orr & Lybro, arguably one of the world’s oldest workwear brands. Headquartered in Cape Town, South Africa, the company provides PPE to critical economic sectors across the region, including industries in mining and engineering, combat and disaster, automotive, medical as well as petrochemical, to name a few.

Whilst things have not always been smooth sailing, John Jacobs looks back at the past 50 years with the business with a smile and for the right reasons. “The situation has not always been easy, but as a team, we have managed to navigate whatever storms came our way, from economic crises to pandemics,” says Jacobs, born and bred in Kraaifontein, Cape Town. He openly talks about the challenges, coming from a blue-collar family that was disadvantaged by a system based on racial segregation. “We were six kids, and my father worked for the railway. So, as you can imagine, there were some tough times along the way.”

R55 per month

When asking how his Sweet-Orr journey started, he chuckles. “I was barely 18 when I joined the company in 1971 as a junior clerk, two years after having to leave high school. I was by far the youngest in the team back then. My key responsibility was dealing with all incoming orders in exchange for a salary of R55 per month. This was considerably more than what I was earning as a post office messenger, my first job after leaving school to help my parents and siblings make ends meet.”

Fifty years have elapsed since those first few days, and a lot has changed for Jacobs. He recalls how he took every opportunity to climb up within the company, founded in 1871 in the United States and that has been operational in Cape Town since 1931.

Back to school

His efforts paid off, which eventually allowed him to buy his first company shares. Ultimately, this resulted in him and his family owning the company outright. “To think that when I joined Sweet-Orr, I didn’t even have a matric certificate,” he says, noting that going back to school was always on the agenda those first years after starting at Sweet Orr. “Education has always been important to me. That is why I went back to night school when I had the chance in the late seventies, aged 24. I wanted to finish what I started in the sixties. Of course, it was tricky to combine school and a full-time job, but I felt I had to walk this journey. Afterwards, I completed a BCom Honours degree at UWC.”

Jacobs’ drive has always been to keep Sweet-Orr at the forefront of South Africa’s protective workwear scene, rain or sunshine. “Thanks to continuous and proper planning, saving for a rainy day, being agile, and not skimping on our products’ and services’ quality, we have stood the test of time. We did so together as a team, and it is something I am incredibly proud of.”

Growing people from within

There is more Jacobs is proud of, and that is his workforce. “To me, our employees – who hail from all walks of life – are our most important asset, and I have made it standard policy to treat them as such. We make a point of continuously investing in and adding value to our staff’s skills sets and abilities,” he explains. “I want those who work for us to have the same opportunities to grow professionally and personally as I did when I joined Sweet Orr as an 18-year-old.”

This is especially important in a country like South Africa, Jacobs says: “There are so many people who want to work but who do not have the right skills. Elsies River, not one of the most affluent areas in Cape Town, is a case in point. Companies can change the status quo by helping people acquire skills that get them into jobs and allow them to climb the ladder. Our staff are like our family, and we treat them as such.”

Investing in employees has benefits for the company too, Jacobs says. “Helping the people who work for us improve their abilities and talents, thus working towards a skilled workforce, makes your operation run smoother and more efficiently,” Jacobs says. “In addition, staff members who feel valued and cared for are loyal and will stand by you in good and bad times. This shows as Sweet Orr has an extremely low staff turnover. The average employee stays with us for 25 years. One of our operational managers has been with us for 40 years before he retired!”

In good and bad times

Living up to the longstanding motto of the company, “We never let you down,” Jacobs believes that building a customer-centric business is vital. He, however, prefers to see and treat customers as partners while extending this philosophy to suppliers and service providers alike. “Together, we work to build each other’s businesses and keep people safe in the workspace, so we can continue to grow local economies from inside out. The best things happen in partnership!”

After celebrating the milestone of 50 years with the organisation, Jacobs is still confident about the future. “This company once started with a dream to manufacture superior quality workwear for those who needed it most. Whilst the dream became reality years ago, we continue to evolve and build – one stitch, one garment, and one satisfied client at a time,” says Jacobs. “Our story is far from finished!”

SA brand Erre Fashion invited to showcase in Paris

South African fashion designers Carina Louw and Natasha Jaume, founders of Erre Fashion, will be heading off to Paris to participate in the inaugural Africa Fashion Up show this September.

Erre Fashion has been invited by Share Africa, in partnership with luxury fashion conglomerate Kering (owners of Balenciaga and Gucci), to feature in the showcase of African design.

The Africa Fashion Up project forms part of a wider initiative by Share Africa. The aim of the project is to introduce the world of fashion to some of Africa’s best creatives whose brands and ethos are on par with the quality expected to be seen on the main fashion runways. Only five brands across the continent were chosen, with Erre being the only South African to make the cut.
Refined power dressing
The local design duo will showcase a collection entitled ‘Home’ in Paris on 17 September this year, ahead of Paris Fashion Week. In the run-up to the show, which will take place at the legendary Hôtel Salomon de Rothschild in the heart of the fashion capital, Louw and Jaume will also participate in a workshop hosted by Balenciaga, to which they have been specifically invited.
“It is an extraordinary privilege to be invited to be part of this project. The opportunity to take our brand and share it with the world is incredible and we are excited to present a collection that embodies our spirit as a people, and a new world order in refined power dressing for women,” says Louw.

Erre (pronounced ‘Air’) was launched in 2013 by Louw and Jaume, former fashion lecturers, who have now turned their eye for detail into a business success story. Taking their inspiration from the rich cultural tapestry of the African continent on their many travels, Erre has formed a reputation for its redefined and refined power-dressing silhouettes that envelope all body shapes and sizes.

On the collection they will be showing in Paris, Louw says: “Home is where we have all rooted ourselves over the past 18-months or so. We could choose to cocoon ourselves or spend the time opening our eyes to the inspiration all around us, which is what we did and what we hope we have captured in this collection.”

Jaume elaborates: “With this collection we wanted Home to remain true to our core yet embody the inherent resilience and humour of South Africans in facing the odds thrown at them.”

“We have also drawn on our unique floral heritage to inform our bright colour palette for this collection, which is also a symbol of promise for brighter beginnings and a celebration of our ‘Mbokodos’ (rock solid in isiXhosa) women of South Africa. As always, our garments will be beautifully constructed technical pieces that provide strong statements for women of courage and hope,” she says.
Ambassadors for local mohair

The SA luxury brand is also an ambassador for locally-sourced mohair, a signature of its seasonal offerings, and something that caught the eye of the Africa Fashion Up team.

Jaume explains: “Mohair is used by many of the top brands worldwide, but few know it originates in South Africa, so Africa Fashion Up is also a chance to remind people that not only does South Africa have a wealth of talent, it also has desirable resources that are sustainable.”

“For a fashion designer, mohair is magic – a beautiful tactile natural fibre that we can twist, bend, mould, contour and knit into any shape we please. A natural fibre that is super comfortable to wear and sustainable. But it was only after taking a road trip in the Karoo in 2019 with Mohair South Africa we truly realised how important this fibre is for South Africa and its ability to generate jobs and boost the economy,” states Louw.   Bizcommunity

Walmart, the Walmart Foundation and Massmart commit R13M to aid recovery efforts in KwaZulu-Natal

As part of this commitment, Massmart delivered an initial consignment of 90 tons of food to Gift of the Givers and FoodForward SA to replenish their warehouses

Underscoring the importance of both short-term and long-term solutions to address hunger and relief efforts related to the recent unrest in KwaZulu-Natal, Walmart, the Walmart Foundation and Massmart are committing more than R13 million in cash and in-kind donations to hunger relief organizations supporting the area. This commitment will help address the current recovery efforts in the wake of the unrest, as well help strengthen the food supply chain for ongoing community support.

To initiate the commitment, Massmart is working with Gift of the Givers and FoodForward SA who are supporting efforts in the impacted communities of KwaZulu-Natal. Working with these organizations, Massmart has already begun recovery efforts with an initial consignment of 90 tons of food including much needed items like rice, baby formula, peanut butter, coffee, canned fish, and maize meal – with many more to come.

Massmart spokesperson Brian Leroni said: “We have longstanding partnerships with Gift of Givers and FoodForward SA and are confident that our combined strength and effort will help kick-start the recovery process in the most vulnerable local communities in KwaZulu-Natal.”

The Gift of the Givers Foundation is the largest disaster response, non-governmental organisation of African origin on the African continent. FoodForward SA is the largest food redistribution organisation in South Africa.

“Our hearts go out to the associates and customers impacted by the recent events in KwaZulu-Natal,” said JP Suarez, Chief Administration Officer, Executive Vice President, Regional CEO, Massmart, Chile and Argentina, Walmart. “Walmart and the Walmart Foundation are proud to help in the recovery of the community and help them build back stronger than ever. Walmart is a global family and working alongside local nonprofits, we are Stronger Together.”

Collectively, these funds will help further strengthen the food bank system in the region and its ability to provide residents access to nutritious food during the aftermath of the unrest and beyond.  African Retail

Mr Price – change in independent auditor

Mr Price Group advised that PricewaterhouseCoopers Inc. (“PwC”) has been appointed as the Company’s independent auditor for the 2023 financial year commencing 3 April 2022 and ending 1 April 2023, with Sharalene Randelhoff as the designated audit partner. PwC will replace Ernst & Young (“EY”), who remain the Company’s auditors for the current 2022 financial year.

The Board welcomes the opportunity to appoint new auditors in the interests of embracing audit firm rotation and good corporate governance principles. The Board sincerely thanks EY for their work with the Company over the years and welcomes PwC as the new external auditors of the Company.

Massmart interim results June 2021

Revenue for the interim period increased by 6.2% to R37.6 billion (2020: R35.4 billion) and gross profit grew 6.7% to R7.7 billion (2020: R7.2 billion). Operating profit before interest came to R37.7 million (2020: operating loss of R97.2 million). Loss for the period attributable to owners of the parent lessened to R1.1 billion (2020: loss of R1.2 billion). Furthermore, headline loss per share from continuing operations narrowed to 166 cents per share (2020: headline loss of 382.1 cents per share).

Dividend
Our current dividend policy is to declare and pay an interim and final cash dividend representing a 2.0 times dividend cover, unless circumstances dictate otherwise. Due to the headline loss reported and the need to preserve cash, as a result of the subdued economic outlook as well as the continued evaluation of the civil unrest impact, no interim dividend has been declared. No interim dividend was declared in June 2020.

Company outlook
Sales for the 7-week period post reporting date have been subdued. In addition to an increased national lockdown level which impacted commercial activity, a full restriction of Liquor sales during the month of July, stricter curfews and renewed limitations on trading conditions of the hospitality and restaurant sectors, have further impacted sales performance. In light of heightening levels of the third wave of Covid-19 infections in South Africa, consumers have remained reluctant to visit crowded spaces and, as we have seen before, shifted their spending towards essential items, as opposed to spending on durable items.

As mentioned, the civil unrest and looting have directly impacted 43 of our stores, with the majority of these stores still in the process of being re-opened. Sales in these stores were approximately R708.0 million lower compared to the same 7-week period in 2020.

Total sales, from continuing operations, for the 33 weeks to 15 August 2021 of R46.7 billion represents an increase of 4.9% (5.9% on a comparable store sales basis), slowing down from the 6.1% sales growth reported for the 26-week period. Excluding the impact of damaged stores, sales for the 33-week period increased by 5.8% from the same period in 2020 (6.9% on a comparable store sales basis). The slowdown in sales growth is mainly driven by the factors set out above.

Total sales, from discontinued operations, for the 33 weeks to 15 August 2021 of R4.6 billion represents a decrease of 15.2% (down 11.7% on a comparable store sales basis), a further deterioration of the 10.0% contraction reported for the 26-week period. Excluding the impact of damaged stores, sales for the 33-week period decreased by 10.3% from the same period in 2020 (decreased by 6.0% on a comparable store sales basis), mostly in line with the trend we have seen for this year so far.

Consequently, total Group sales for the 33-weeks to 15 August 2021 of R51.3 billion represents a sales increase of 2.7%, with a 4.1% increase in comparable store sales.
With the impact of Covid-19 related trading restrictions, levels of infections as the third wave moves throughout the country, the slow pace of the Covid-19 vaccine rollout and the impacts of the recent civil unrest, we expect the subdued economic environment to persist. While this will present its own set of challenges, we are confident in our ability to successfully navigate through them. We expect the trends in SG&A and GP margin performance achieved during this reporting period to continue into the second half of the year, and expect that the majority of the stores damaged by the civil unrest will be operational for peak trading during the fourth quarter.

Rex True – acquisition of Telemedia stake

Shareholders are referred to the announcement released on the Stock Exchange News Service (“SENS”) on 13 November 2020 (the “13 November 2020 announcement”) regarding the sale of shares agreement (“Sale of Shares Agreement”), that the Company, together with African and Overseas Enterprises Ltd. had entered into with the Trustees for the time being of the Bretherick Family Trust, Peter Fairbank Bretherick, Ryan David Bretherick, and Stephen Mark Bretherick in terms of which Rex Trueform would acquire a 63.71% stake in Telemedia (Pty) Ltd. (the “Transaction”), together with the update in this regard released on SENS on 18 June 2021.

The Company advises that the Agreement was amended in writing on 25 August 2021, in respect of the following:

-The condition precedent requiring the Independent Communications Authority of South Africa to provide its written consent to the Transaction (the “Condition Precedent”) by an extended date of no later than 29 January 2022.

-The definition of “Effective Date” of the Transaction which will now read as follows:

*“Effective Date’ means the 1st (first) day of the calendar month following the Unconditional Date, or 1 November 2021, whichever occurs last, or such later date thereafter which is as soon as reasonably possible after the issue of the Consideration Shares and as agreed to in writing between the parties.”

The Condition Precedent remains outstanding. The implementation of the Transaction remains subject to the fulfilment of the Condition Precedent.

Mr Price – results of the annual general meeting

Shareholders are advised that at the Mr Price Group Annual General Meeting (“AGM”) held on, Wednesday 25 August 2021, all the ordinary and special resolutions as set out in the notice of AGM dated 11 June 2021 were passed by the requisite majority of votes of shareholders present in person or represented by proxy.

Ahead of the AGM, the Group sent communication to 25 shareholders representing approximately 55% of its issued ordinary shares for purposes of engaging generally on the resolutions proposed at the AGM and particularly on the Group’s remuneration policy and remuneration implementation report. Through this process, the Group actively engaged with 15 of these shareholders. Mr Price Group is disappointed at the overall result of the voting on these resolutions, particularly given the adjustments made to the remuneration policy and remuneration implementation report over the past few years and the new long-term incentive plan that was implemented during 2020.

The Group strives to apply its remuneration philosophy of “partnership” consistently and appropriately and the Group will continue its efforts to engage with shareholders to understand more fully the concerns around the remuneration policy and implementation thereof. Accordingly, shareholders are invited to advise the Group of their reasons for their dissenting votes on the remuneration policy and/or the implementation thereof, and whether they wish to engage with the Group on these issues. Correspondence in this regard should be addressed by email to the Head of Investor Relations, Matt Warriner (kbezuidenhout@mrpg.com), by 30 September 2021. Thereafter the date and time of requested engagements will be scheduled with shareholders individually. Change in director responsibility

Shareholders are advised that Lucia Swartz, who joined the Mr Price Group board of directors in August 2020 as an independent non- executive director, has been appointed as a member of Social, Ethics, Transformation and Sustainability committee with effect from 26 August 2021.

Woolies final results June 2021

Revenue for the year grew by 9.3% to R80.9 billion (2020:R74.1 billion), gross profit went up 14.2% to R28.9 billion (2020: R25.3 billion), operating profit shot up 42.4% to R6.7 billion (2020: R4.7 billion) and profit attributable to shareholders of the parent jumped to R4.2 billion (2020: R557 million). In addition, headline earnings per share jumped 212.5% to 374.4 cents per share (2020: 119.8 cents per share).

Dividend
The board of directors (‘Board’) has taken a decision to declare a final gross cash dividend per ordinary share (‘dividend’) based on a pay-out ratio of 60% of second half headline earnings of the combined Woolworths South Africa business segments (FBH, Food and WFS).

Notice is hereby given that the board has declared a final gross cash dividend per ordinary share (‘dividend’) of 66.0 cents (52.8 cents net of dividend withholding tax) for the 52 weeks ended 27 June 2021, a 25.8% decrease on the prior year’s 89.0 cents per share.

Company outlook
The trading outlook in both regions is uncertain and will be impacted by further Covid-19 waves and resulting lockdowns and restrictions, as well as the slow pace of vaccination in both regions. In Australia, current lockdowns are significantly curtailing trade in our brick-and-mortar stores, while in South Africa, we are in the midst of the third wave while the after-effects of recent civil unrest are also likely to be felt for some time.

Nonetheless, we have a stronger foundation and will continue to respond tactically to any immediate challenges, whilst remaining steadfast in the execution of our longer-term objectives.

We would like to express our gratitude to all our employees across the Group, particularly those on the front line, who courageously put the needs of their colleagues and our customers ahead of their own. We would also like to thank our suppliers and partners for their commitment to our business, as well as our customers for their continued support. The past year has again demonstrated the resilience of our business, driven by the passion and commitment of all our people.

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