- July 28, 2010
- Posted by: admin
- Category: Clothing and Textiles
The South African clothing industry has been dealt another heavy blow by the news that clothing manufacturer Seardel Group is planning to close down its Intimate Apparel division in Cape Town due in part to what unions have said was “the refusal by Woolworths to improve the prices it paid” for merchandise.
Seardel said this week that it would close down the division because it had been making a loss for a couple of years now, and was unable to get increased prices for its apparel from retailers. It also said 800 jobs would be lost as a result.
Andre Kriel of the South African Clothing and Textile Workers Union (Sactwu) blamed the closure of the Intimate Apparel division partly on Woolworths’ refusal to up the prices it paid. Woolworths was the factory’s major retail customer.
Seardel CEO Stuart Queen said that “the principle problem is that you can’t get an increase in the selling price from retailers”.
Woolworths divisional drirector Brett Kaplan did not address the claims against the retailer, but said that Seardel had told Woolworths the high costs of labour associated with the manufacturing of lingerie was the reason for closing shop.
“The wage differential with their international competitors has made it impossible for them to compete with overseas suppliers and to sustain acommercially viable business,” Mr Kaplan said.
Johann Baard. executive director of the Cape Clothing Association, said the closure emphasised the need for the government to look at ways to boost job creation. Mr Baard said local manufacturers were outsubsidised, not outperformed, by their competitors.
‘This is a brutal reality which has brought about the continuing price deflation in the apparel sector and which is now the main contributing factor (to) the destruction of jobs.”
Sactwu owns close to 40% of Hosken Consolidated Investments. which in turn owns 70% of Seardel.
Sactwu bought the embattled Seardel Group for R200m using workers’ money, promising them the move would help save jobs.
Mr Kriel said this week: “When we bought into Seardel it was bankrupt with 15 000 jobs at risk. Buying this company has saved jobs, it was a good decision.”
Source: Business Day – Bekezeu Phakathi