33 of 2017

Newsletter No.33   01 September 2017

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Clothing, Textile, Footwear and Leather Sectors to convene conference to find responses to SA’s downgrade to Junk status

Labour and business in the clothing, textile, footwear and leather (CTFL) sectors are deeply concerned about the impact of the downgrades of South Africa’s debt on our industry and the broader economy.

The downgrades by various rating agencies during 2017 (and possible future downgrades) will raise the cost of borrowing for the workers, businesses, government and consumers. This will have a negative impact on government spending on CTFL support measures and incentives, on investments by businesses and on spending by consumers on the products made in CTFL factories.

We are concerned that it could lead to increased factory closures and retrenchments in the CTFL sectors, placing an even greater strain on South Africa and its poor. This is not good news, given our already high levels of unemployment.

These factory closures and retrenchments will take place, if a proper and credible turnaround plan is not formulated immediately, and implemented expeditiously.

The stagnant economy has already caused our sectors to lose more jobs than in recent years, mainly as a result of fewer orders from retailers and less procurement from government and corporates.

To understand the impact of the downgrades (including of possible future downgrades, especially of our local currency debt) and to develop measures to mitigate its impact, CTFL trade unions (SACTWU and NULAW) and employer associations have convened a conference under the theme ‘Surviving junk: finding responses for the CTFL sectors.’

The conference will take place on 6 and 7 September at the Coastlands Conference Centre in Durban and will be attended by 500 delegates, including CTFL factory workers, union officials, factory directors and managers, service providers, government officials, the retail sector, as well as delegates from associated sectors like cotton farming. The whole value chain will be represented, as we require a united response.

The conference is being supported by the value chain’s training authorities, the Fibre Processing & Manufacturing (FP&M) SETA and the Wholesale & Retail (W&R) SETA.

Several senior government leaders have been invited to address the Conference. We have commissioned discussion papers from senior researchers from Wits University’s Corporate Strategic Industrial Development (CSID) research programme and the Industrial Development Corporation (IDC). The CSID programme has done an international comparative study of countries that have undergone debt downgrades and, from these examples, drawn lessons for South Africa, while the IDC will present its views of the possible impact of the downgrades on the South African economy and the CTFL sectors in particular.

The outcomes of the conference will be used to construct a plan to mitigate the impact of the downgrades on the CTFL sectors.

Issued by-

Sicelo Nduna, Genereal Secretary, NBCCMI, Alvan Pillay, General Secretary, NTBC and Gerald Naidoo, General Secretary, NBCLISA, on behalf of the CTFL Stakeholder Initiative.

If further comment or information is required, kindly contact

  • Andre Kriel, General Secretary, SACTWU: 021 4474570
  • Ashley Benjamin, General Secretary, NULAW 0832584433
  • Johann Baard, Executive Director, SA Apparel Association: 0834444069
  • Hans Brouwer, Chairperson, SA Cotton Textile Processing Employers’ Association: 0715687345
  • Theo Heffer, Secretary, Association of SA Manufacturers of Luggage, Handbags & General Goods: 0826521090
  • Noel Whitehead, Chairperson, Southern African Footwear and Leather Industries Associated: 0827737211
  • Mark Osthuizen, Secretary, SA Training Employers Organisation: 0828811158

Boody launches babywear range

Nick Stein and Richard Frankel, who brought the Australian eco brand, Boody, to South Africa in October 2015, have introduced a Boody babywear range and are about to launch in 10 stores in Mauritius.

Nick Stein & Richard Frankel

Boody is made from fabric created from organically grown bamboo fibre and is hypoallergenic, anti-bacterial and anti-fungal as well as ultra-absorbent. Moisture-wicking properties pull sweat away from the skin to avoid irritation, making it perfect for the hot South African climate. Bamboo is sustainable, requires no pesticides and relies only on rainwater to grow.

Consumer demand for natural textiles

Launched in a few independent health shops and six Dis-Chem stores, the brand has grown its distribution network from 17 outlets a year ago to over 100 today. The reason for this success, according to Stein and Frankel, is that, globally, consumers are shying away from synthetics and gravitating towards natural textiles. Even though South Africa lags international trends, demand for fabrics that are both skin and eco-friendly is gathering momentum.

The display stand is made from recycled car parts that accommodate a full range of 286 pieces as well as a guide to health benefits and sizing and fits into just a quarter of a square metre of retail space, which makes it as ideal for small independent retailers, as it is for large chain stores. Its reduced retail space also makes it popular in health shops and airport pharmacies.

Retailers are coming round to the idea that, because bamboo clothing helps in managing conditions such as eczema and thrush, it is also a complementary product category in the healthy living/healthy environment niche market. Boody is not the only clothing containing bamboo out there, but Stein says the differentiator is its Ecocert certification, which vouches for organic, sustainable growing and ethical manufacturing processes.

New ranges are also in the pipeline. With some consumers already using Boody for low impact exercise, the logical next step has been to launch Boody Body, a range of functional gym wear. A sleepwear range, Boody Bed, is expected to follow in 2018.

Woolworths expands food division but clothing remains biggest profit driver

By Robert Laing

Woolworths’ clothing division remains its biggest profit centre, despite flat sales and squeezed margins. The retail group reported on Thursday morning that overall revenue for the 52 weeks to June 25 grew 3.7% to R69bn.

While its food division contributed 40% of group revenue, its contribution to pretax profit was 36%. Its clothing and general merchandise division, meanwhile, contributed just 21% of revenue but 39% of pretax profit.

Australian department store chain David Jones contributed 22% of revenue and 23% of pretax profit, and sister Australian retailer Country Road 16% of revenue and 17% of pretax profit.

Woolworths’ bottom line was boosted by R1.76bn profit from the sale of David Jones’s Sydney headquarters, bumping basic earnings per share up by 25% to 566.7c.

But diluted headline earnings per share, which exclude profit from the property sale, declined 8% to 417.7c. The final dividend was maintained at R1.33, holding the total dividend for the year flat at R3.13 per share.

Though clothes and general merchandise contributed the most profit, Woolworths’ focus in the reporting period was on expanding its biggest revenue generator, food. Woolworths added 11 new food stores during its 2017 financial year, expanding its food retail space by 7.6%. Food revenue grew 8.5% to R27bn and pretax profit rose 8.3% to R2bn.

“Average price movement for the year was 8.4%. Lower food inflation into the second half of the year saw the return of increasingly positive volume growth,” CEO Ian Moir said in the results statement.

Its clothing and general merchandise sales grew 1.4% to R14bn while pretax profit fell 6% to R2.2bn. Clothing retail space grew by a net 2%.

“Despite the difficult trading conditions, we traded ahead of most other apparel retailers and continued to build our fashion credibility with a segmented, brand-directed customer experience,” Moir said. “We are in the process of rolling out our new beauty offering that will bring international brands such as Chanel and Estee Lauder into our stores for the first time.”

Though David Jones grew revenue slightly in Australian dollars, in rand it declined 1% to R15bn and pretax profit plummeted 29.5% to R1.3bn.

“We have continued to drive the transformation of David Jones and have achieved significant milestones on numerous key initiatives, including the launch of a new customer relationship management programme, new merchandise and inventory management systems and the opening of a new David Jones Food concept in Bondi Junction, Sydney,” Moir said.

Country Road’s revenue grew 1.6% to R10.8bn, but pretax profit fell 5.7% to R958m.

Sweet-Orr set to make an international comeback

South African-based protective workwear manufacturer, Sweet-Orr is set to make its international comeback when it exhibits at the A+A Trade Show in Dusseldorf, Germany in October.

Originally founded in New York in 1871, Sweet-Orr is synonymous with superior quality and industrial expertise. From its humble beginnings in the late 19th century, Sweet-Orr became an international leader in the workwear field during the 20th century. Despite decades of success, Sweet-Orr succumbed to the economic challenges that plagued many global businesses in the 80s, forcing the company to scale back its business and focus on its core operations in Africa.

In spite of its diminished international presence, the company has remained at the forefront of protective and casual workwear for the last 146 years. Incorporating the latest innovations into its product development, Sweet-Orr pays homage to its heritage by keeping workers comfortable and safe. Operating from a cutting edge 5500m2  production facility in Cape Town, South Africa, Sweet-Orr currently supplies high quality protective wear (including Flame Retardant, Flame Acid and Acid Repellant Garments) as well as hardwearing workwear to various industries including; mining, petrochemical, aeronautical, hospitality, medical, construction, combat and disaster.

This year Sweet-Orr is set to relaunch its international business as it takes part in the A+A Trade Show for the first time. Taking place from 17-20 October, the A+A Trade Show is the largest international trade forum for safety, security and health at work. Sweet-Orr will showcase its products at an exhibit at the Trade Fair and meet with interested parties and partners from around the world.

In addition to its international expansion, Sweet-Orr is launching its Heritance brand of casual workwear, which pays homage to its classic Ace of Spades range from the 1930s. Combining durability and comfort with vintage-inspired style, Heritance is a contemporary celebration of Sweet-Orr’s 146 year legacy.
“Tallulah’s celebrates its 40th Birthday on Friday, 1st September.

Tallulah’s started from humble beginnings in Claremont main road and soon established a loyal following. Tallulah’s then expanded into Cavendish Square and eventually settled into its own building in Cavendish Street, Claremont where it has called home for the last 17 years. There was a brief expansion in Kloof Street in the late 90’s and there is currently a second branch in the wine region of Franschhoek.  The driving force behind the business has been the indomitable Lynn Pike. Having started the business in 1977 with R1500 in savings, she has earned her reputation as a talented range builder, designer and business women. She still radiates energy and positivity and she looks forward to many more years helping women of all shapes and sizes dressing in a way that highlights their strengths and allows them to look and feel themselves. Famous for calling every one of her customers ‘Darling’, Tallulah’s has been her life’s work.

All are welcome to pop in on Friday and say Hi to Lynn.”

Did you know………

The first official Fashion Week started in 1943 in New York. Its main purpose was to distract the attention away from French fashion during World War II and kickstart the way for American designers.

To be a Haute Couture designer, one must get approved by the Chamber of Syndicale, the governing body of fashion in Paris. How serious is the approval? Well, only 14 fashion houses have been approved out of the vast amount of designers we consider haute couture. Some of the non-approved applicants are great designers, such as Giorgio Armani.

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