Home / Knowledge / News / Textiles / Seardel reports profit despite hiccups
Seardel reports profit despite hiccups
24
May '11
South Africa's largest textile and clothing manufacturer Seardel has showed profit for the first time since 2007. The company has declared a profit of R8.5 million in the year ended in March 2011 compared to a loss of R203.4 million the previous year. The revenue of the company also saw an increase of 11.7 percent to R2.4 billion in the year.

Despite a rise in group turnover, the company's gross margin dipped by 2.8 percentage points to 23.4 percent. It was due to factors such as the strong rand, the surge in cotton prices from a long term average of US$ 0.58 to about US$ 2 per pound, and the inability to pass the increased input costs to customers.

During the period, the turnover of Seardel's textile division increased 11 percent to R982 million while its operating profit increased 218 percent to R56 million.

Seardel's clothing division, however, reported a R21 million operating loss during the same period, which is a modest improvement compared to the previous year's loss of R26 million. The clothing division is known for brands like Speedo, Brooksfield and After Eden.

Stuart Queen, the CEO of Seardel, has attributed the loss in clothing operations to external factors such as customs fraud and non-compliance of minimum wages by competitors, which makes it difficult to compete.

Customs fraud is perpetuated by either not declaring or under declaring goods. It is a problem because the benchmark price is being set by illegal imports. Similarly, when other companies do not comply with minimum wages rules, they are able to sell clothing at cheaper prices, the CEO said.

Another factor that added to the problems of the company's clothing operations during the period was a 22 percent duty applicable on imported fabric and trims.

Although the company has adopted measures to improve workflow efficiency, the apparel manufacturing operations are likely to remain under pressure, unless there is a change in the functioning of the external environment.

Meanwhile, the company has launched Brand Identity, a new division to manage the existing brands. Queen is hopeful that the new division would deliver significant results in the coming years.

Seardel, which has a workforce of 10,000 people, is planning to launch Love SA, a range of casual wear in August 2011. The new range to be sold through Cape Union Mart stores will highlight local products in order to save and create jobs.

The company has recently launched a unique brand 46664, a lifestyle range which is being sold through Stuttafords and independent retailers. 46664 was former President Nelson Mandela's prison number when he was confined to Robben Island. The company pays royalties for using 46664 and the funds go to the Nelson Mandela Children's Fund.

Seardel CEO said that his company is in talks with other companies in the UK and the US for partnering with them to sell the 46664 brand internationally.

Fibre2fashion News Desk - India


Must ReadView All

Apparel/Garments | On 25th Jun 2017

Half of 7,000 new apparel online each day target women

Adobe has released its first Digital Price Index for apparels,...

Textiles | On 25th Jun 2017

First Insight, Chico's FAS enter partnership

First Insight, a technology company transforming how retailers make...

Apparel/Garments | On 25th Jun 2017

Expand changing use of social and web resources

With over 400 million impressions to date and web traffic of over two ...

Interviews View All

Riddhika Shah
SS Homme

'Worsted wool is the ideal fabric for menswear'

Shiladitya K Joshi
Truetzschler India Private Limited

India ITME provides a platform to interact with our stakeholders

Frank Gossmann
Rotorcraft AG

‘RT3 motto is: Do not check millimetres, check colours.’

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
June 2017

June 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search