Newsletter No. 05 /19 February 2021                          

Click this link to access your Sourcing Directory https://newsbriefs.co.za/index/

Click on any ad to go to the advertisers website..

TFG supports DTIC’s on-going commitment to local manufacturing development

Leading fashion and lifestyle retailer TFG, celebrates the advancement of local manufacturing development following Minister Ebrahim Patel and the Department of Trade, Industry and Competition’s (DTIC’s) commitment to the Retail-Clothing, Textiles, Footwear and Leather (R-CTFL) Masterplan.  This progress includes DTIC’s continued commitment to reinvigorating the entire value chain.

The recently announced introduction of duty rebates on woven fabrics is a clear indication of DTIC’s dedication to furthering the localisation of manufacturing in South Africa.  This initiative will undoubtedly improve the competitiveness of the local clothing industry and will bring significant change to the domestic mills that are still in operation.

However, stakeholders should also urgently consider the removal of all duty on yarns. This change is essential to supporting larger purchases of locally made fabrics. In addition, further investment to support the upgrading of domestic fabric mills will ensure that they can manufacture rapidly evolving fashion fabrics. These interventions, combined with the recently announced duty rebate, will assist in further boosting DTIC’s bold interventions in South Africa’s retail-clothing value chain.

“In our on-going support of DTIC’s retail-CTFL Masterplan and the growth of local manufacturing, TFG continues to pursue initiatives and collaborations that drive the realisation of the Masterplan’s objectives that will ultimately drive larger-scale manufacturing employment in South Africa. We are directly committed to this critical task through our manufacturing facilities, which have been upgraded and expanded over the last few years and which are successfully increasing their sales into our various retail channels”, said TFG CEO, Anthony Thunström.

To further support the dynamic development of the manufacturing sector in South Africa, TFG has recently agreed to sponsor a Future Manufacturing post at the Toyota Wessels Institute for Manufacturing Studies (TWIMS) in Durban. The funding intends to enable the exploration of new business models in the manufacturing sector, especially those relating to rapidly emerging digital technologies that are likely to re-shape the R-CTFL value chain in the next few years. “South African manufacturing capability must advance quickly over the next decade. TFG is eager to support initiatives focused on developing world-class management capabilities needed to drive South Africa’s localisation strategy”, added Thunström.

Although the number of people employed in their supply chain is expected to grow substantially, there are almost no Black Production Managers. To address this gap and as part of TFG’s Transformation journey, February also marks the launch of TFG Manufacturing’s Black Production Management Development Academy and its innovative two-year Quick Response focused curriculum. This genuinely pioneering programme is likely to be a critical enabler of TFG’s local expansion strategy. The programme adopts an immersive, exciting, and blended approach to management development with a strong emphasis on practical application and real-life relevance that will more than adequately equip and skill South Africa’s black production managers of the future.

“TFG remains a steadfast partner to the DTIC and the South African R-CTFL industry in our joint mission to grow local manufacturing. We recognise the major constructive role retailers like ourselves can play in supporting the development of South Africa; and we are keenly aware of the competitive advantages we can forge for ourselves through the advancement of domestic manufacturing capabilities,” concluded Thunström.

About TFG: With 31 retail brands that trade in fashion, value, jewellery, accessories, sporting apparel, cellular, homeware and furniture, TFG is one of the leading retail groups in South Africa.  Besides South Africa, TFG Africa also has a presence in Botswana, Zambia, Namibia, Lesotho and Eswatini through various retail brands. TFG first entered the UK market through the acquisition of the premium womenswear brand Phase Eight in 2015, followed by the acquisition of Whistles in 2016 and Hobbs in 2017. TFG’s presence in the Australian market was strengthened through its acquisition in July 2017 of Retail Apparel Group Pty Ltd (RAG), a leading Australian menswear apparel retailer.  TFG’s vision is to be the leading fashion lifestyle retailer in Africa whilst growing its international footprint. TFG has over 4 300 outlets in 31 countries, and employs more than 34 500 people with over 16,1 million customers (RSA).

Converse launches student debt relief campaign # Kickthedebt

Converse has launched its version of the movement to wiping out student debt called #kickthedebt. The issue of student is a prominent issue South African youths face, with an increasing need for the issue to be erased. Converse is pledging R1 Million to supporting and assisting students across South Africa, allowing students with interests across any career field the chance to apply.

The focus of the #kickthedebt campaign is to try and alleviate even a small portion of the result of generational economic depression. The campaign aims to make a difference to the youth in South Africa as education is prohibitively expensive, and as a result, student debt is incredibly high. With the support of 2 influencers to act as ambassadors, the campaign will be brought to life inspiring and exciting the target market by using social and digital platforms accessible to students.

The campaign is supported by Radio personalities Mo Flava and Fix Moeti:

Mo Flava

Mo Flava is Metro FM’s breakfast show host. Mo is already known as someone who cares about education. He has a partnership with Boston Media House that provides bursaries for students to study the media industry

DJ Fix

DJ Fix, not only a radio and TV star. Fix Scholarship – a non-profit organisation that provides educational and business bursary opportunities for Female Entrepreneurs in Africa that want to create social change in their communities. Fix has always believed that business, arts and social development and the impact thereof, are not mutually exclusive so decided to head back to school to study social enterprise in the US and by undertaking this journey Fix has managed to fund 13 students through the Fix Scholarship and will be opening applications for the next student intake through SDC

Converse has made the level of access to entry for students easy by using digital platforms. To combat those barriers, applicants can enter and access the #KicktheDebt nomination form on the Converse e-commerce website; www.converse.co.za, where friends and family will also be able to motivate for funds. 

At the end of the nomination phase, Skye and/its appointed vetting service provider shall assess each nomination and select the final beneficiaries.

640 JOBS SAVED THROUGH DEVLAND AND MASSMART MERGER
APPROVED BY COMPETITION TRIBUNAL

At least 640 jobs will be saved as a result of the merger, approved by the Tribunal, whereby Devland Cash and Carry (Pty) Ltd (“Devland”) will acquire certain stores owned by Masscash (Pty) Ltd (“Masscash”), which is controlled by Massmart Holdings Limited (“Massmart”).

Devland owns and controls several firms that are active in the retail and wholesale trade of groceries and related products. The target stores are mainly grocery retail stores located in various parts of the country.

No retrenchments

Employees of the target stores will be transferred in terms of section 197 of the Labour Relations Act and the conditions of their employment will not be negatively affected.

Although the Competition Commission (“the Commission”) recommended unconditional approval of the transaction (and the merger parties undertook that there would not be any retrenchments as a result of the merger), the Tribunal has imposed a condition that no employees will be retrenched as a result of the merger for a period of nine months following the transaction’s implementation date.

Greater spread of ownership

Devland is owned and controlled by two historically disadvantaged persons (“HDPs”) while the target stores are not owned by HDPs. As such, the merger will also have a positive effect on the promotion of a greater spread of ownership, in particular to increase the levels of ownership by HDPs and workers in the grocery market.

No competition concerns

The Tribunal has agreed with the Commission’s assessment that that the merger is unlikely to lead any substantial lessening or prevention of competition in any market in South Africa.

Steinhoff – notice of availability of proposal

Notice is hereby given to inter alia certain creditors (“Scheme Creditors”) of Steinhoff International Holdings (Pty) Ltd. (“the Company”), of a proposed scheme of arrangement and compromise (the “Scheme”), and of the availability of the proposal / Scheme document (the “Proposal”).

Accessing the proposal and its annexures
The Proposal and its annexures are available at www.SteinhoffSettlement.com, and by completing a request form from the Registrar of the High Court of South Africa, Western Cape Division, Cape Town.

Further communications
If the Company communicates further with Scheme Creditors, it shall do so:
*on Steinhoff International Holdings N.V.’s website (www.steinhoffinternational.com);
*at www.SteinhoffSettlement.com;
*on the Stock Exchange News Service and the equivalent service of the Frankfurt Stock Exchange;
*by email to the legal representatives of the active claimant groups, alternatively by email directly to the active claimant groups;
*by email to the known legal representatives of Scheme Creditors, alternatively by email directly to the known e-mail addresses of known Scheme Creditors; and
*otherwise in accordance with any publication requirements as may be directed by the Western Cape High Court.

Action required
-A Scheme Meeting will in due course be convened by notice to Scheme Creditors eligible to attend and vote at the Scheme Meeting.
-If eligible Scheme Creditors wish to attend and vote at the Scheme Meeting, they should take note of the Important Dates and Times posted on www.SteinhoffSettlement.com, provide the Claims Administrator with the necessary supporting documentation evidencing their status as a Scheme Creditor and, subject to the dispute resolution process contained in the Proposal, provide substantiation of the value of the claim they assert, and follow the process set out in the Proposal.

Summary of the proposal
The Proposal contemplates a compromise between the Company and Scheme Creditors, defined in the Proposal, and who are envisaged to be settled in accordance with the terms of the Proposal.
-The Proposal shall become effective if (i) it is adopted by the statutory required majorities of the Scheme Creditors; (ii) it is thereafter approved and sanctioned on a final and non-appealable basis by the High Court and (iii) all of the Suspensive Conditions are satisfied. Following the Proposal becoming effective, compromises will become effective and distributions will be made to the Scheme Creditors who are entitled thereto.

-Scheme Creditors comprise what are defined in Annexure A to the Proposal as –
*the Contractual Claimants;
*the Financial Creditors; and
*the SIHPL Market Purchase Claimants,

who are envisaged to be settled in accordance with the terms of the Proposal.
-The Proposal shall become effective if (i) it is adopted by the statutory required majorities of the Scheme Creditors of the Company that participate in the filing and voting procedures; (ii) it is thereafter approved and sanctioned on a final and non-appealable basis by the High Court of South Africa as contemplated in section 155(7) of the Companies Act; and (iii) all of the Suspensive Conditions (as defined in Annexure A to the Proposal) applicable to the Proposal are satisfied. Following the Proposal becoming effective, compromises will become effective and distributions will be made to the Scheme Creditors who are entitled thereto in accordance with the provisions of the Proposal. If the Proposal does not become effective, it shall be of no legal force or effect, shall not constitute a compromise of any claims of Scheme Creditors, and shall not constitute an offer of any kind on the part of the Company capable of acceptance by Scheme Creditors.
-If you are a Scheme Creditor of SIHPL, you are invited, in accordance with the terms of the Proposal, to file a claim and participate in the voting procedures set out therein, as you may be eligible to receive a payment based on the Proposal.
-The Proposal shall be put to a vote at a virtual meeting or meetings, convened for such purpose.
-The Proposal does not constitute, on any basis whatsoever, an admission of any liability on the part of SIHPL towards any party that has instituted legal proceedings against SIHPL, or intends to institute such legal proceedings or has threatened to institute such legal proceedings or who may assert a claim of whatsoever nature and howsoever arising, in legal proceedings.
-The Scheme Creditors are encouraged to contact their respective advisers regarding the filing and voting procedures set out in the Proposal and, in addition, to consult www.SteinhoffSettlement.com for further information.
-As a number of the matters set out in the Proposal are complex and technical in nature, all interested persons are encouraged to consult with an independent legal advisor, accountant, financial advisor or any other professional advisor who may be of assistance to interested persons in respect to the contents of the Proposal.

Translations of this notice
In addition to the languages below, a translated version of this notice will be made available in Arabic, Bulgarian, Czech, Greek, Hebrew, Hungarian, Latvian, Lithuanian, Mandarin, Polish, Romanian, Slovak, Slovene and/or Turkish on request (e-mail: info@SteinhoffSettlement.com).

Accessing the addendum and the amended proposal
The Proposal and its annexures, as well as the Addendum and the Amended Proposal and its annexures, are available at www.SteinhoffSettlement.com, and by completing a request form from the Registrar of the High Court of South Africa, Western Cape Division, Cape Town.

Translations of this notice
In addition to the languages below, a translated version of this notice will be made available in Arabic, Bulgarian, Czech, Greek, Hebrew, Hungarian, Latvian, Lithuanian, Mandarin, Polish, Romanian, Slovak, Slovene and/or Turkish on request (e-mail: info@SteinhoffSettlement.com).

Steinhoff-agreement-Deloitte and Conservatorium

Steinhoff International Holdings N.V. (SIHNV or the Company, together with its subsidiaries, Steinhoff or the Steinhoff Group) announces the following update on implementation of its proposal to resolve the various multi-jurisdictional legacy litigation and claims against the Steinhoff Group, including those against former South African holding company Steinhoff International Holdings Proprietary Limited (SIHPL).

Conservatorium
SIHNV previously announced that a hearing, scheduled for 8 February 2021 in the Amsterdam District Court following a request by Conservatorium Holdings LLC (Conservatorium) to appoint a restructuring expert to SIHNV pursuant to Article 371 of the Dutch Bankruptcy Act (enacting elements of the recently enacted pre-insolvency proceedings, Wet Homologatie Onderhands Akkoord ter voorkoming van faillissement)(Application), had been postponed until 15 February 2021. SIHNV also informed the market that it intended to challenge that Application. Following a number of constructive engagements between the parties an agreement has been reached, in principle, between, among others, SIHNV, SIHPL, Conservatorium and certain entities linked to Christo Wiese. This agreement is subject to a number of conditions. The result of agreement reached among the parties is that Conservatorium will withdraw the Application.

Deloitte supports Steinhoff Global Settlement
SIHNV also announces that together with SIHPL it has reached an agreement with Deloitte Accountants B.V. and Deloitte & Touche South Africa (together: “Deloitte”) pursuant to which Deloitte will support the proposed Steinhoff global settlement proposal announced on 27 July 2020. This means that Deloitte will make additional compensation available to certain Steinhoff claimants, including the market purchase claimants (the MPC Claimants) in exchange for certain waivers and releases, provided that Steinhoff successfully completes the contemplated Dutch suspension of payments (the “Dutch SoP”) and the statutory compromise process under South African law (S155 Scheme). Deloitte is still in discussions with certain representatives of the MPC Claimants on the details of this offer, which envisages that such claimant representatives will be entitled to receive a certain incremental cost compensation. A settlement between Deloitte and the Dutch Vereniging van Effectenbezitters (VEB) was previously announced in October 2020.

Deloitte does not in any way admit liability for the losses incurred by Steinhoff and its stakeholders as a result of the accounting irregularities at Steinhoff. Provided that Steinhoff successfully completes the contemplated Dutch SoP and the S155 Scheme and certain other conditions are fulfilled, Deloitte has agreed to offer an amount of up to EUR 55.34 million for distribution to MPC Claimants in exchange for certain waivers and releases (the “Deloitte MPC Settlement Fund”). Steinhoff and Deloitte have agreed that MPC Claimants or their representatives who in due course wish to apply to receive a part of the Deloitte MPC Settlement Fund must use the same claim form as the form which they in due course shall use for submitting their claims in the Dutch SoP and the S155 Scheme. In that form, MPC Claimants or their representatives who in due course wish to apply to receive a part of the Deloitte MPC Settlement Fund must (i) expressly state this wish in the to be published claim form by ticking the relevant box and (ii) must expressly provide the waivers and releases for the benefit of Deloitte relating to the ‘Events’ and the ‘Allegations’ as set out in the form. If one or both of these boxes has not been ticked in the claim form, the applicant is not entitled to receive any distribution from the Deloitte MPC Settlement Fund. In due course, further information and claim forms will be published on www.steinhoffsettlement.com . In addition to the offer to the MPC Claimants above, provided that Steinhoff successfully completes the Dutch SoP and the South African S155 Scheme and certain other conditions are met, Deloitte has further agreed to offer an amount of EUR 15 million for distribution to certain contractual claimants. Eligible contractual claimants will receive individual notice from Steinhoff on the manner in which they can apply to receive a share of the offered amount.

Further Information
The Steinhoff Group will provide updates in respect of implementation of the global settlement in due course. Claimants will be able to review additional information and, in due course, submit their claim details on the following website: www.SteinhoffSettlement.com. The Company has a primary listing on the Frankfurt Stock Exchange and a secondary listing on the JSE Limited.

HomeChoice – trading statement

The Covid-19 pandemic continues to have an adverse impact on the macro-economic environment and consumer behaviour, which has resulted in challenging trading conditions for the Group in the second half of the year. Tighter restrictions imposed by the South African government in response to the second wave of the Covid-19 pandemic have further disrupted the Group’s business operations.

As reported in the announcement of the summarised Group financial results for the six months ended 30 June 2020 released on the Stock Exchange News Service (“SENS”) on 31 August 2020, earnings per share (EPS) and headline earnings per share (HEPS) for the six-month period ended 30 June 2020 were 54.6% lower than the comparable period in the prior year. The Group is expecting to report a similar performance in the second half of the year and is accordingly advising shareholders that EPS and HEPS for the twelve- month period ended 31 December 2020 are expected to range between 144 cents to 209 cents, or between 52% and 67% lower than the 436.0 cents reported for both EPS and HEPS in the previous corresponding period (the twelve month period ended 31 December 2019).

The Group’s liquidity and capital position continues to remain strong as a result of the focus on cash generation and management of working capital, with cash on hand of R415 million, up from R378 million at 30 June 2020. The Group is conservatively capitalised to take advantage of any improvements in the economy.

The Group’s financial results for the year ended 31 December 2020 will be released via SENS on or about 15 March 2021.

Pepkor – resignation of independent director

The board of directors of the Company (the “Board”) advised that Mr. Johann Cilliers has resigned from the board, and the relevant committees of Pepkor, with effect from 16 February 2021, to be able to devote more time to his personal interests. Mr. Cilliers was the lead independent director, the chairman of the audit and risk committee and a member of the nomination committee.

Ms. Fagmeedah Petersen-Cook has been appointed as the interim chairman of the audit and risk committee.

Shareholders and noteholders will be advised in due course of the filling of the vacancies on the committees arising from Mr. Cilliers’ resignation.

Rex True – change in audit firm

Shareholders are notified of the termination of the external audit services provided by KPMG South Africa Inc. with effect from 22 January 2021 due to early adoption of the mandatory audit firm rotation rule issued by the Independent Regulatory Board for Auditors. PricewaterhouseCoopers Inc., with Richard Jacobs as the audit partner, has been appointed as the external auditors of the company with effect from 23 January 2021.

Did you know……..

. “The textile sector still represents 10 to 20 percent of pesticide use.” The State of Fashion, McKinsey, 2020)

Cotton is one of the most commonly used fabrics when it comes to the fast fashion industry. By now it’s probably easy to guess that the conventional cotton fabric most often used in the fast fashion industry is made unethically. Shockingly, over one quarter of the world’s pesticides are being used to grow this conventional cotton. Combined with open-loop cycles, cotton production within the fast fashion industry poses a significant threat to health and well-being for agricultural workers, for eco systems and ultimately for all of us. Looking for alternative, more sustainable fabric options, is integral for improving the impact of the fashion industry.