36 of 2020

Newsletter No. 36 / 25 September 2020  

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SAFW, Mall of Africa collaborate to hold fashion event

South African Fashion Week and Mall of Africa are collaborating to hold South Africa’s first hybrid designer collections showcase this year. The fashion event will combine a three-day streaming programme of 26 digital runway shows from October 22 to 24 with the SAFW Trade Show at the Mall of Africa with participation of more than fifty designers in November.

The SAFW Trade Show with designers of menswear and womenswear as well as accessories ranging from footwear and handbags to costume jewellery and millinery will be held from November 1 to 3. There will also be the SAFW Pop Up Shop where fashion lovers will be able to interact and buy directly from all the participating designers from November 26 to 28, also in the mall.

“This hybrid combination of both a digital and live fashion experience allows us to navigate the complexities of trading and doing business effectively whilst simultaneously being highly mindful of the safety aspects associated with the pandemic,” said SAFW director, Lucilla Booyzen. According to Booyzen, the 2020 SAFW collections are trans-seasonal in line with international trends toward collections that incorporate both cool and warm weather elements. They are also increasingly representing a move towards a “slow fashion” ethos of timeless design and sustainable production.

“Whilst the move toward cleaner fashion production in South Africa still faces many challenges, there is a very real commitment from many designers to pursue this very necessary transition to a new fashion order,” Booyzen said.

“The designer community is predominantly SMME’s, they all employ small contingents of artisans such as seamstresses and pattern makers. It has been a superhuman challenge for these businesses to stay afloat and retain jobs in the absence of any trade or cash flows. This opportunity to showcase their collections in preparation for summer is vital,” Booyzen added.

According to Booyzen, sponsorships have become more critical to sustainability than ever before and the partnerships with Mall of Africa, Vodacom Red, Cruz Vodka and Carlton Hair are highly treasured.

“Mall of Africa is the home of South Africa fashion. Part of our long-term strategy is to support African designers and fashion entrepreneurs by providing exposure to a formal retail environment, in a Super Regional mall that assists them with foot fall, marketing and mentorship. Our SAFW partnership plays an important part in providing this mentorship to our local designers and fashion entrepreneurs,” said Michael Clampett, head of Asset and Property Management-Retail of Attacq Limited.

Katleho Mahloane, executive head of Division: Segment Marketing commented: “Vodacom’s flagship Red contract plans have evolved to give much more value and exclusive benefits to those who expect more, much like SAFW which delivers a better show with every year. We are therefore excited to be a partner in what is SA’s first virtual showcase of the finest fashion through the great talent the shows attract. This partnership will also allow us to support the industry through our participation and allow our VIP Red customers a front-row experience at what promises to be an exclusive event, and an African first”

“SAFW is equally committed to this process and is facilitating greater collaboration between designers and downstream value chain through our partnerships with, among others, the SA Mohair cluster and Cape Wools SA as well as weavers and knitters,” Booyzen said.  F2F

Ethiopia’s GEM cluster members get 1.9 million birr assistance

Eleven members of Ethiopia’s Greening Ethiopian Manufacturing (GEM) Project cluster recently received an assistance of 1.9 million birr to improve performance and attain their sustainable consumption and production related goals. The beneficiaries are micro, small and medium enterprises (MSMEs) operating in the project target sectors of textile, leather and handcrafts, according to project coordinator Heyeru Hussien.

The financial support to the enterprises was extended by Ethiopian Chamber of Commerce and Sectoral Association (ECCSA), PRECISE Consult International, and Innovative Organizations (INOA).

Specifically, the support enables model cluster member enterprises to implement and demonstrate innovative and new sustainable consumption and production practices, and to increase the likelihood of replicating more MSMEs, the coordinator pointed out.

ECCSA secretary general Yesuf Ademnur said the financial support would create job opportunities for the youth by encouraging and scaling up the capacity of the enterprises, according to a report by an Ethiopian media outlet.

GEM Project is funded by the European Union under the Switch Africa Green Initiative that aims to support more than 100 MSMEs adopting sustainable consumption and production practices and seizing green growth opportunities, thus contributing to improved economic performance of private sector and to the enhancement of their international competitiveness. F2F

Tribunal approves Foschini’s acquisition of Jet, with conditions

The Tribunal has approved, with conditions, the proposed merger whereby Foschini Retail Group (Pty) Ltd (Foschini) will acquire Edcon’s Jet Division i.e. the assets and business conducted by Edcon Ltd as a going concern under the “Jet” division out of certain Edcon physical retail stores in South Africa.

In considering the proposed transaction, the Tribunal conducted virtual proceedings and heard submissions from the Competition Commission (the Commission), the merger parties as well as the South African Commercial Catering and Allied Workers Union (SACCAWU).

The Tribunal’s order and the conditions will be made available on the Tribunal’s website in due course. The conditions to the merger include the following, among others:

Employment

  • The acquiring firm (Foschini) will not retrench any employees as a result of the merger for a period of 2 (two) years from the merger’s implementation date;
  • Transferring employees must be transferred to Foschini in accordance with the provisions of section 197 of the Labour Relations Act, after the merger implementation date; and
  • Foschini will give preference to eligible Edcon employees should vacancies arise in the Jet Business for a period of 3 (three) years from merger implementation date.

Transferring Stores

Among others, the merging parties will ensure that the transferring stores are fully integrated into the acquiring firm’s structures after the merger implementation date and are operated in accordance with the acquiring firm’s business plans after the merger implementation date, subject to external circumstances (such as prevailing macro- and micro-economic conditions, the effects of the COVID-19 pandemic, landlords honouring the terms of the new lease agreements, and electricity supply disruptions) and internal circumstances (such as the acquiring firm’s trading performance).

Local Procurement

The merged entity must ensure that Jet stores maintains at least the same ratio of procurement of apparel products from South African manufacturers and suppliers as it did at the end of its preceding financial year. In addition, the merged entity must endeavour to increase the target firm’s ratio of procurement of apparel products from South African manufacturers and suppliers as at the end of its preceding financial year.

Background

The Foschini Group is one of the foremost independent chain-store groups in South Africa and has a diverse portfolio of fashion retail brands offering clothing, jewellery, cell phones, accessories, cosmetics, luggage, sporting apparel and equipment, homeware and furniture.

The Jet Division is Edcon’s discount department store division. It sells clothing, footwear, homeware, some cosmetics as well as cellular and insurance products.

The Commission, which assesses large mergers before referring them to the Tribunal for a decision, found that the transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets.

The Commission recommended to the Tribunal that the merger be approved with conditions relating to employment and local procurement

Woolies final results June 2020

Revenue for the year decreased to R74.058 billion (2019: R75.179 billion), gross profit lowered to R25.349 billion (2019: R27.964 billion), operating profit lowered to R4.726 billion (2019: R5.121 billion), profit attributable to shareholders of the parent came to R557 million (2019: loss of R1.086 billion), while headline earnings per share lowered to 119.8 cents per share (2019: 342.9 cents per share).

Dividend
As previously advised the Board has not declared a final dividend for the 2020 financial year, with the interim dividend of 89.0 cps therefore being the total dividend for the year. Future dividends will be considered in the context of the conditions prevailing at the time.

Outlook
The trading environment in both Southern Africa and Australasia remains challenging and uncertain and is expected to remain so for the foreseeable future. The full economic impact of the pandemic is still unfolding and we expect consumer spending to remain constrained. Heightened competition and promotional activity is likely to persist, notwithstanding some consolidation in the industry. Post year-end, the Australian State of Victoria imposed an initial stage 4 lockdown in the metropolitan areas for a period of six weeks. This was extended for a possible further six weeks and has resulted in store closures during the period. The decline in trade in Victoria, CBD areas across the country and airport locations has, in part, been offset by the marked shift to online channels. The Group’s intention is to ensure that we not only endure the impacts of the pandemic but that we can learn from it and emerge both strategically and tactically stronger as a result. To this end, the Board and management team remain resolutely focused on optimising the Group’s financial position, liquidity and capital structure, and on repositioning the Group for sustainable longer term growth. Any reference to future financial performance included in this statement has not been reviewed or reported on by the Group’s external auditors and does not constitute an earnings forecast.

Did you know……..

YKK

Have you ever noticed that many clothing zippers bear the letters “YYK” regardless of who makes the clothing? Those letters stand for Yoshida Kogyo Kabushikikaisha (which roughly translates as “Yoshida Company Limited”). As simple as the concept of a zipper is, they are tricky to make, and a single zipper tooth going awry can render a garment unwearable. Better to buy wholesale than for clothing manufacturers to each make their own. YKK is the largest zipper manufacturer in the entire world.

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