South African retailers, in addition to The Foschini Group Ltd (TFG) and Woolworths Holdings Ltd, are expanding their investments in local clothing brands, either to reduce reliance on Chinese imports and to protect a chain of origin destabilized by COVID-19 restrictions.
Companies have subscribed to a business plan that includes the goal of obtaining 65% of their products from local brands over the next decade. While progress toward purpose varies along the chain, the spread of COVID-19 has a subtle collective purpose.
The pandemic has caused “such disruptions to the chain of origin that everyone calms down and thinks, “Will we ever have to rely on China again?” TFG CEO Anthony Thunstrom said in an interview. looking to buy locally. “
The move comes when South African President Cyril Ramaphosa seeks to revive the fabric production industry, which would enable a task-creating purpose to be achieved by reducing an official unemployment rate that is at a maximum of 17 years.
“As South Africa opened up to the industry in the late 1990s, China entered and decimated the market because collection was the only deciding factor,” said Lawrence Pillay, procurement manager. woolworths. ” But the global has replaced drastically and now there is more than the charge. Sustainability, carbon footprint, situations of logistical demand: all these points will force us to rethorder.
However, opening new factories to a pandemic will not be easy.
The decline of the industry has led to a shortage of raw skills, education and materials, meaning significant advance investment would be required to eventually save cash through shorter delays and less expensive transportation costs. This is at a time when customer confidence is low, leaving stores out.
“There are some products, such as heavy winter jackets, that we just don’t have the fabrics and the ability to produce in South Africa,” Thunstrom said.
South Africa will not absolutely revive the industry because local stores “cannot update all product lines,” said Lulama Qongqo, analyst at Mergence Investment Managers in Cape Town.
TFG, which buys about 22% of its clothes locally, has hired 550 more this year at two South African factories and sees the possibility of loading several thousand more, Thunstrom said.
As South Africa strives to revive its garment industry, neighbouring countries such as Mauritius and Madagascar are also increasing their capabilities. The movements made through these island nations are examples of how self-sufficiency can be achieved in the industry, Pillay said.
“If we want our local stores to move 65% of their products within South Africa’s borders, then we want to take a look at a wide variety of product categories,” he said. “In 28 years, I have never noticed greater cooperation between stores, government, staff and manufacturers. In 10 years, we can recreate the industry. “