41 of 2023

Newsletter No 41/20 October 2023                              


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TFG launches first collection from its Sustainable Design Incubator

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TFG (The Foschini Group) has launched the first collection from its innovative Sustainable Design Incubator programme aimed at fostering sustainable fashion practices and supporting young emerging designers. The programme provides a platform for emerging talents to showcase their creativity while making a positive impact on the environment.

“With TFG’s commitment to job creation and the development of the South African design and manufacturing industry, our Sustainable Design Incubator provides an important platform to grow skills and provide experience for young designers. TFG aims to empower talented South African designers by offering unrivalled access to the market and networking opportunities, which are vital for building successful and thriving fashion businesses,” said TFG CEO, Anthony Thunström.

The emerging designers were selected through a rigorous process, with TFG collaborating with established institutions like the Cape Town Fashion Council, SA Fashion Week, and All Fashion Sourcing. This ensures that the programme enrols exceptional talent with the potential to excel in the fashion industry.

The TFG Sustainable Design Incubator provides a six-month incubation period for the designers, fostering their growth and honing their skills from some of TFG’s best talent.

The incubator challenges these designers to prioritise the use of zero-waste design techniques and more sustainable fabrics in creating commercial garments. During their mentorship period, they undergo comprehensive training sessions conducted by designers and entrepreneurs, focusing on topics such as marketing, a sustainable approach to fashion, waste reduction through zero-waste practices, and commercial skills.

Additionally, each designer gets access to TFG’s design and manufacturing facilities to produce their collections and receives sponsored equipment.

Leveraging TFG’s ecosystem, the selected designers’ ranges have launched on Bash. The market access opportunity provided through Bash is designed to leverage TFG’s more than 30 million customers through the local fashion and lifestyle shopping app.

A further highlight is some of the designers getting the coveted opportunity to showcase their designs at the renowned SA Fashion Week.

“The Sustainable Design Incubator stands as a testament to TFG’s commitment to fostering sustainability and diversity in the fashion industry. By empowering emerging designers, TFG is actively contributing to a more sustainable and inclusive future for fashion,” concluded Thunström.    Bizcommunity

Cosatu wakes up to a scary possibility

By Natasha Marrian

President of Cosatu Zingiswa Losi. Picture: Thulani Mbele

The labour federation has often threatened to snub the ANC at election time — but now it realises it needs to do all it can to keep the party in power

Around this time last year, Cosatu was in the middle of an existential debate — whether to dump the ANC and support the SACP in the 2024 polls.

It’s a threat the labour federation has repeatedly used over the years to further its own interests, or to help or hinder an ANC faction.  But it has become an increasingly empty threat as the ANC has gradually slid closer to losing its ruling party status.

Last year’s edition of the electoral-support muscle flex by the federation — now dominated by public sector unions — was probably linked to the bruising round of public sector wage negotiations taking place at the time. Predictably, nothing came of the bluster and Cosatu is set to back the party to the hilt next year.

Last weekend Cosatu president Zingiswa Losi, addressing the South African Clothing & Textile Workers Union, raised pointed questions about Cosatu’s electoral backing for the ANC.

She tells the FM unions often seem to forget how much their members have benefited from successive ANC governments.

The national minimum wage introduced in 2019, which saw the hourly rate for thousands of workers rise from below R10 to nearly R26 now, was a major victory, Losi says.

Other wins she identifies include the two-pot pension system, which will allow workers in financial straits to draw from their pension funds when it takes effect next year, and the R350 social relief of distress grant. Cosatu lobbied strongly for all these measures, Losi says.

While the freeze on hiring by the National Treasury has riled Cosatu affiliates, from the South African Democratic Teachers Union to police union Popcru and the National Health, Education & Allied Workers Union, it is not a deal-breaker for the federation’s support for the ANC.

“We are all frustrated, hurt and angry when our comrades let us down in government,” Losi says. “But we must also be honest; the ANC and the alliance remain the best and only vehicle to advance working-class struggles and improve the lives of our members.”

The Cosatu president clearly believes unions could do more to help the ANC’s electoral cause.

“Are we participating in by-elections? The ANC lost its majority in the Sol Plaatje municipality in Kimberley on Wednesday [October 11] for the first time. We lost a by-election in Msukaligwa in Mpumalanga. Are we assisting the ANC in these elections? Or are we content to sit on the sidelines?

“Are we prepared to place the lives and jobs of the working class in the hands of the opposition parties? Where we have lost, like at Tshwane, what is our plan to win the voters back to the movement?” she asks.

Unions generally appear to have no discernible elections programme in place, and for Losi this is a major problem.

“This is why I keep arguing that what we need are strong unions, strong, united unions … And we have to begin influencing the ANC from its basic level, from its branches,” she says.

“We cannot keep relying on national leaders to keep the alliance going … It is there at the branch that we can begin reconfiguring the alliance.”

But election campaigns are in many cases the last thing on the mind of unionists.

More pressing issues range from plunging union membership — it stands at just 23% of the formal workforce — to unemployment, the stagnant economy and internecine feuding.  The National Union of Mineworkers, for example, a founding member of Cosatu, has suspended its general secretary, William Mabapa, on what appear to be spurious grounds.

“We have a decision as a federation to support the ANC in 2024, now we have to implement that decision,” says Losi. “We don’t have the luxury of not implementing it … If we don’t, we will have to live with the consequences.”

Already, she notes, Cosatu battles to get the ANC — its historical ally and ideological twin — to go along with all its policy proposals. So imagine how the federation’s problems would be multiplied if the ANC lost power.

“If a party like the DA takes power, it will amend the Labour Relations Act and remove the power of trade unions. We must appreciate this reality,” she says.

“The ANC has its own challenges, but we have to appreciate the gains [unions have enjoyed]. We have a choice as a federation to fight for the soul of the ANC and ensure renewal in both the ANC and ourselves.”

What is clear is that Cosatu’s fate remains inextricably tied to that of the ANC — even the loss of another major province in the elections could damage the federation.

Until now Cosatu, despite its periodic threats to deal its alliance partner a blow at election time, probably never dreamt the ANC might ever actually suffer defeat. That reality is getting ever so close.   

Retail sales fall for ninth consecutive month

by Thuletho Zwane

Picture: 123RF/FOTO MIRCEA

Interest rates continue to weigh on the indebted, with many consumers relying on credit to fund the high cost of living

Retail trade fell by 0.5% from a year earlier in August after a downwardly revised 1% decline in the prior month and compared with market forecasts of a 1% drop, Stats SA data showed on Wednesday.

This was the ninth consecutive month of decreases in retail activity, though the slowest in the sequence that began in December 2022.

On a month-on-month basis, sales volumes increased by 0.2%, after a 0.4% increase in July.

FNB senior economist Siphamandla Mkhwanazi said at this stage, these outcomes suggest that the retail industry will still contribute positively to the third quarterly GDP growth.

A closer look at the data shows four out of seven categories recorded a decline in annual volumes.

The largest declines were recorded among the general dealers and hardware material categories, falling 3.8% and 5% respectively.

Household furniture and pharmaceutical retailers categories declined by 1.6% and 1.2% respectively, each detracting 0.1 percentage points from the headline number.

On the opposite end, a stronger performance by the clothing and footwear retailers category persisted, with 11.3% year-on-year growth in volumes, contributing 1.7 percentage points, supported by the food and beverages retailers category with a 0.7%, or a 0.1 percentage point, contribution.

Other retailers grew by 0.5%, contributing 0.1 percentage points to the headline number.

Mkhwanazi said credit data suggests that demand and supply for consumption credit, especially credit cards, remains strong, both in the bank and nonbank sectors.

“In addition, anecdotal evidence suggests that real wage growth might be turning marginally positive, for the first time since the second half of 2021, largely due to slower inflation,” Mkhwanazi said. “If sustained, these could provide marginal support to shopping activity in the near term.”

However, Mkhwanazi added that these are counteracted by our expectation of a further tightening in lending standards, as the cumulative impact of past rate decisions filters through, as well as depressed consumer sentiment.

“As such, we maintain our view of subdued growth in household consumption expenditure for the remainder of the year,” he said.

Investec economist Lara Hodes said while sentiment did pick up among retailers in the third quarter, in the non-durable goods and semi-durable goods sectors of the market, it remains below the long-term average.

“Retailers continue to face a number of operational challenges, notably load-shedding,” Hodes said.

She said despite a deceleration in consumer price index (CPI) inflation from levels recorded earlier in the year, consumers remain financially constrained.

“Interest rates, which are likely to remain at elevated rates for longer, continue to weigh on the indebted, with many consumers relying on credit to fund the high cost of living, while the expanded unemployment rate, which includes individuals who desire employment regardless of whether they are actively seeking work, is above 42%, demonstrating the extent of SA’s unemployment predicament,” she said   

Pick n Pay interim results August 2023

Turnover for the interim period increased to R54.1 billion (2022: R51.3 billion) whilst trading profit contracted to R31.8 million (2022: R1.3 billion). Loss for the period was reported at R571.3 million (2022: profit of R453.3 million). In addition, headline loss per share came to 138.24 cents per share (2022: headline earnings of 97.73 cents per share).

Shareholder distribution
Owing to the pro forma loss declared for the period, the board has not declared an interim dividend.

Group outlook and trading statement for the full year
Management expects to face continued headwinds in the latter half of the year, but anticipates the H2 FY24 earnings outlook to be stronger than H1 FY24, driven by (a) more supportive earnings seasonality, (b) net incremental energy cost growth to be relatively low (given the high H2 FY23 base), (c) non-repeat of supply chain cost duplication, and (d) efficiency gains from the H1 FY24 Project Future initiatives beginning to contribute.

H2 FY24 earnings are, however, likely to be below H2 FY23. As a consequence, in terms of section 3.4(b) of the JSE Listing Requirements, the Group advises shareholders that it expects EPS, HEPS, and proforma HEPS for full year FY24 to decrease by more than 20% when compared to EPS, HEPS and pro forma HEPS reported for full year FY23.

TFG – resignation of CFO

Ms Bongiwe Ntuli will be leaving the Group with effect from 30 November 2023. She will remain available to consult to the Group for a period of 12 months. Mr Anthony Thunström will, subject to confirmation by the JSE, fulfil the role of both CEO and executive financial director for the period 1 December 2023 until the appointment of the new CFO

One silk cocoon produces an average of 600 to 900 meters of silk filaments, but it takes four to eight pieces to make one strand of silk thread.  In all, it takes about 30,000 silkworms to produce 12 pounds of raw silk.


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