South Africa’s R40-billion clothing and textile sector was recovering before retailers hit the worst trading climate in decades - but despite the slump some manufacturers are experiencing growth driven by demand for “fast fashion”.
SMMEs that supply mainly the local market dominate the sector – less than 5% of clothing production is exported according to Benchmarking and Manufacturing Analysts (B&M) – which means it has the flexibility to bounce back into recovery and grow exports.
Cotton SA statistician, Helena Claasen, said in a statement prepared for the International Cotton Advisory Committee recently that jobs were being shed in the clothing and textile sectors. There were about 31 958 people employed in the overall textile sector in June 2016, approximately 1% more than June 2015 but jobs in knitting mills had declined 3% to 4482.
“Employment in the clothing sector was 35 027, nearly 11% less than the same time in 2015,” Claasen said.
B&M Analysts chairman Dr Justin Barnes said retailers had been hit by competition from international chains Cotton On, H&M and Zara and were victims of their own offshore sourcing strategies, which had led to job losses, reduced consumer disposable income and declining retail sales.
“The industry was recovering until retailers experienced the most difficult trading conditions in 20 years. Mr Price is down about 40% on its share price. Woolworths and Truthworths are taking a battering - and the reason is they don't have customers. Everyone is battening down the hatches for a tough period. We have reached a plateau but the question is how wide is this trough?”
“Clothing is more entrepreneurial and less professional so barriers to entry are low which means as quickly as we lost the industry we can rebuild it. If we had a master plan around clothing we could triple output in ten years,” Barnes said.
But Barnes added that many clothing manufacturers had not invested in technical and management skills over the past 15 years. And now that retailers were turning to local production for quick delivery of “fast fashion” because consumers no longer wanted to wait a season for international trends they saw on social media, they have “bulging order books” which they can’t fulfil.
However, some SMMES like Sheraton Textiles in Cape Town and Celrose Clothing in Tongaat have bucked the trend and are competing globally against India and China.
Celrose Clothing CEO John Comley said the company had heavily invested in multi-skilling staff and in design and development with the support of the Department of Trade and Industry. The company exports to SADC and supplies “fast fashion” to retailers like Woolworths, Foschini and Edgars - and anticipates 20% growth in its clothing and footwear business in 2017.
“When everyone looked at ways of doing things cheaper and importing we kept our skills and tried to compete. By providing smaller volumes we reduced our turnaround time from 18 days to two days,” he said.
Sheraton Textiles CEO Nick Steen said the firm had focused on competing with China against its weaknesses, providing “fast fashion” and designer textiles with details such as embroidery.
“We have a quick response model and have focused on areas where we know they can’t focus. They are not particularly good on design and there are a lot of areas where they are not strong,” he said.
