34 of 2023

                           Newsletter No 34/1 September 2023                              

                  

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New CEO Appointed to Cape Union Mart

The Board of Directors of the Cape Union Mart Group this week announced the appointment of a new Chief Executive Officer, Mike Elliott. Elliot brings almost 30 years of retail experience, having held various senior leadership roles in retailers like Edgars, Sunglass Hut, Luxottica and Naartjie.

“As we celebrate our 90th birthday with Mike at the helm, we embark on a new chapter in our company’s journey. His extensive experience in the retail industry and visionary leadership will undoubtedly steer the Cape Union Mart Group towards unparalleled success and growth,” says Philip Krawitz, Executive Chairman at Cape Union Mart.

A family man with a passion for the outdoors, Elliott is known for his ability to build a people-centred culture, while delivering exceptional results.

“We firmly believe that this transition will bring fresh perspectives, new initiatives, and a renewed sense of purpose to our organization. Together, we shall not only adapt to the ever-evolving retail landscape but also thrive in it,” says Krawitz.

Elliott will formally take on his role as of Monday, 16th October 2023.   African Retail

Twyg Sustainable Fashion Awards call for nominations

2022 Influencer Award winner, Khensani Mohlatlole. Image by Tash Singh

The annual Twyg Sustainable Fashion Awards are now open for nominations, with new categories to celebrate five years of honouring South African fashion changemakers.

Striving to inspire a fashion and textile industry that is kind, fair, inclusive, diverse, nature-friendly, sustainable, and embraces circular design principles, the Twyg Sustainable Fashion Awards celebrates and supports emerging and established designers across accessories, footwear and clothing, tastemakers, and activism.

Nominations for the Awards close on Friday, 15 September 2023.

How to enter

You do not have to submit garments or prepare a portfolio: a Twyg entry form (formulated in collaboration with Eco Standard South Africa) has been created where you can simply fill in the required details for your chosen category. Click here.

And the categories are…

This year, there are 10 categories that people can nominate themselves, their brands, or their organisations for:

Emerging Designer Award (including students)

Accessory Award

Footwear Award

Innovative Design and Materials Award

Trans-seasonal Award

Farm-to-fashion Award

Nicholas Coutts Award

Social Impact Award

Retail Award

Tastemaker Award

Five new categories have been added this year – Emerging Designer Award (formerly the Student Award), Footwear Award, Farm-to-fashion Award, Social Impact Award, and the Tastemaker Award.

The new categories hope to expand the reach and impact of the Awards, with the understanding that it’s not just fashion designers that will transform the industry, but thought-leaders, conscious entrepreneurs, and image makers too.

The eleventh category is the Changemaker Award. This category is not open to nominations but will be awarded to the contestant with the highest overall score and will be judged against the criteria set for the Changemaker Award.

Last year, this award was won by Cleo Droomer. “It is so wonderful to embark on a new journey and for your art to be recognised and appreciated when it is such a big departure from where you have been before. I am so appreciative of the opportunity to be seen by the industry,” said Droomer when he received the award. Previous Changemaker Award winners include Mbali Mthethwa, founder of The Herd, Amanda Laird Cherry and Lara Klawikowski.

Prizes

The Changemaker will be awarded a cash prize of R100,000. The winner of the Nicholas Coutts Award receives R10,000 from Nicholas’ family.

The judges

Omoyemi Akerele (founder of Lagos Fashion Week)

Mimma Viglezio (Swiss creative consultant, writer, editor, and broadcaster)

Esethu Cenga (co-founder and CEO at Rewoven)

Dr. Sipho Mbatha (Head of the Department for Design Studies at the Faculty of Arts and Design, Tshwane University of Technology)

Nisha Kanabar (founder of Industrie Africa)

Sharon Armstrong (fashion director for Wanted, Sunday Times Lifestyle and Sowetan S Mag)

The judging will take place in October and the winners will be announced at a private award ceremony in late November in Cape Town, South Africa.

Nominations close on Friday, 15 September 2023.

View the full list of 2023 Twyg Awards categories and entry forms here.     Bizcommunity

Woolworths to expand clothing chain in ikasi

By Katharine Child

Picture: Sunday Times/Masi Losi

The retailer reports improved results in its fashion business and the highest operating margin of an SA food retailer

Having turned around its fashion division, cut debt and sold the struggling David Jones business, Woolworths plans to expand its clothing chain by opening much smaller stores in townships where it is not represented.

About 20 shops are planned for this financial year as Woolworths moves from fixing the business to growing it.

The 10 existing stores, which include ones in Gugulethu, Thembisa and Giyani, should eventually be increased to about 100 in the medium term, said CEO Roy Bagattini.

Expansion into the township market through the opening of smaller stores is a growing trend among retailers and restaurateurs as they seek to access the untapped spending potential of the informal economy.

The Spur restaurant group is planning to open Panarottis and RocoMamas outlets in smaller formats, making it easier to find new locations. Hardware retailer Cashbuild is considering a similar move.

The 300m² Woolworths fashion shops are almost 10 times smaller than the traditional 2,000m² stores in shopping malls.

The stock range in smaller stores is limited but “it’s got a unique proposition in terms of product offering. The people that work in those stores also are really skilled at styling and selling,” Bagattini said.

Speaking at the retailer’s financial year end results presentation, Bagattini said that in contrast to traditional stores that are typically self-help outlets, the smaller stores would have more involved customer service employees encouraging customers to try on clothing.

The smaller outlets would have shorter leases, and because of the limited stock on offer it would be easier to replace items that do not sell.

In the financial year end to June 25, Woolworths grew profit before tax by almost a third and increased its dividend 36.4% to R3.13 a share as its turnaround strategy takes hold.

Profit before tax spiked 29.5% to R6.7bn and adjusted diluted headline earnings per share, a common profit measure in SA, rose 35.6% to R5.08.

When Bagattini took over in 2020, he promised to assess and fix the non-performing parts of Woolworths, especially the loss-making David Jones and the underperforming fashion business. Debt has been reduced by R9bn and the Australian department store sold for R1.1bn after finally showing a profit.

David Jones, which was bought for more than R21bn in 2014, lost the group more than R14bn and took management time away from the SA business and the better-performing Country Road clothing group in Australia.

Momentum

Bagattini said the retailer has achieved what he promised when he initiated the turnaround strategy three years ago: “What we said we would do, we have done.”

Woolworths now has the cash and momentum to grow the business.

“We have structurally repositioned our group,” he said. “We can now use these levers [and] this firepower to our advantage to grow our business and generate greater levels of economic profit.”

Bagattini also promised to fix the SA clothing business, which frequently had to flog goods on sale. Woolworths reduced the number of ranges and the amount of female formal wear on offer and focused on what it calls six must-win categories, which include denim, underwear and children’s wear.

It has added external brands such as Levi jeans, a company where Bagattini once held a senior position.

Full-price clothing sales have grown from above 70% of sales to 80% in line with the strategy.

In the year to June 25, clothing prices rose on average 11.6% and sales in same stores grew 8.3%. This means that despite the healthy performance, Woolworths sold fewer items than the year before.

Its food business boasted an operating profit margin of 6.9%, which is higher than other grocers in SA and many globally.

It is focusing on attracting greater spending from customers who do their primary shopping elsewhere.

Bagattini explained that 90% of its customers shop at other grocery stores but buy some goods from Woolworths. If the retailer can increase this spend by 1%, it will grow revenue by more than R1bn.

Dash delivery

Prices in the food division grew 8.3%, below underlying product inflation of 9.9%, as Woolworths tried to attract customers.

Its Dash delivery service, which lagged behind competitors as it added cold chain fridges to scooters, is close to breaking even.

In the year, the group spent R2.9bn buying back 6.6% of shares in issue, a move that can drive up the share price and increase value for shareholders.

The share price closed 1.51% lower at R75.44 on Wednesday on the JSE.  

Woolies final results June 2023

Revenue for the year grew to R72.7 billion (2022: R65.7 billion) and gross profit increased to R26.8 billion (2022: R23.2 billion). Operating profit from core trading activities went up to R6.6 billion (2022: R5.8 billion). Profit attributable to shareholders of the parent rose to R5.1 billion (2022: R3.7 billion). In addition, headline earnings per share from continuing operations went up to 423.4 cents per share (2022: 368.7 cents per share).

Dividend

The Board has taken a decision to declare a final gross cash dividend per ordinary share (‘dividend’), based on a payout ratio of 70% of Continuing operation earnings.
Notice is hereby given that the Board has declared a final dividend of 154.5 cents (123.6 cents net of dividend withholding tax) for the 52 weeks ended 25 June 2023, being a 3.7% increase on the prior year’s 149.0 cents. This brings the total dividend for the year to 313.0 cents, representing a 36.4% increase on the prior year’s total dividend of 229.5 cents.
Company outlook

The trading environment is likely to remain challenging across both geographies for the foreseeable future, as elevated inflation and interest rates pose a headwind to the outlook for disposable income and discretionary spend. This is having a particular impact on Australian consumer confidence, resulting in a contraction in retail footfall. In the case of South Africa, whilst our Food business is inherently more resilient, severe energy shortages are likely to continue to weigh on the overall cost of doing business.

Notwithstanding the challenging macro backdrop, we remain confident in our ability to deliver against our strategies. We have a robust balance sheet and a simplified Group structure post the sale of David Jones, and are well positioned to leverage our strengthened foundation, to not only optimise and grow our businesses, but to permanently step change the value creation profile of WHL.

Truworths – board appointments

Mr Wayne Muller was appointed as a member of the Company’s Remuneration Committee and Nomination Committee.

Mr Hans Hawinkels was appointed as lead independent director of the board.

Over 2B t-shirts are sold every year. The t-shirt segment’s revenue is estimated at $44B in 2023. Most revenue from the t-shirt market is generated in China ($5.7B in 2023). The market size of women’s t-shirts is expected to grow by 6.1%

 

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