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MOVERS & SHAKERS: QUEEN MOVES QUICKLY TO FIX AILING SEARDEL

20 Apr General

Stuart Queen officially takes over as CEO of the troubled clothing and textile manufacturer Seardel in November.

But, given all its challenges, he has no time to lose and is already actively involved in running the company.

Seardel, which has announced the closure of some Frame Textiles divisions, which will affect about 1400 jobs, has already retrenched about 1000 people.

Queen defended the decision, saying divisions that have made consistent losses, such as the Frame divisions earmarked for closure, need to be closed. “Each division needs to be sustainable.”

Queen, along with a newly appointed senior management team including Anthony Dixon-Seager, an experienced turnaround specialist, have to re-engineer a company that for 40 years was led by founder, chief executive and industry doyen Aaron Searll.

Queen brings a different approach with a background in Hosken Consolidated Investments (HCI), Seardel’s largest shareholder since last year. He has worked in corporate finance and private equity in a variety of industries. Dixon-Seager has experience in turnarounds and has a strong grounding in the motor industry.

Queen said the company is introducing stricter disciplines, such as zero defect and total quality management.

He said Seardel has not been managed in a way that extracted efficiencies or economies of scale. Within the group, businesses competed against each other rather than working together and making use of efficiencies.

The lingerie and swim-wear businesses, for instance, have been joined.

Internationally, businesses in this sector are often state owned or highly subsidised, making it difficult for the local sector to compete.

“Unless we have subsidisation or protectionism, I fear that only very few industry players will be able to survive and the job losses will continue,” he said.

Queen called for an effective subsidy programme or higher tariffs that are enforced.

He said local producers needed to differentiate through production flexibility to keep the industry alive. “A significant risk for retailers is either too much stock or insufficient stock, so the industry needs a quicker turnaround time, something they can’t get from China.”

Source: Business Times – Adele Shevel