Created by successful serial entrepreneurs Eric Edelstein and Eran Eyal, co-owners of eSquared Fashion, Springleap is South Africa’s new and improved answer to Threadless.

Proudly Mzansi, Springleap aims to uplift and empower South Africans from the ground up. “We offer artists, designers and people with something to say the opportunity to be publicly showcased. Call us a gallery without walls if you like, but what better way to get known than to have your designs emblazoned on a t-shirt?” says Eran Eyal.

Once you’ve joined the Springleap community, you can create your own profile; upload, vote and list your favourite designs; comment and respond to what others are saying about the latest entries or celebrity duals and update your status - similar to Twitter and Facebook.

Each month a winner is chosen based on the highest average community rated score for a design. The winner, plus 19 runners up, will see his/her design printed on high quality slim cut t-shirts that can be ordered via Springleap.com or bought at one of Springleap’s exclusive partners eSquared in Durban and Cape Town or at Big Blue in Rosebank, Irene and Kalkbay for the first 30 days. Thereafter the t-shirts will be available via local resellers who, once approved, will be able to log into Springleap.com and order the desired number of t-shirts they require based on the demand from their target market.

Says Eric Edelstein: “For us empowering designers is fundamental to Springleap’s ongoing success. For each t-shirt we print the winning designer will receive a R2 royalty and the runners-up a R1 royalty. This also applies to all reprints of t-shirts which, depending on fan demand, could earn designers some unexpected yet deserved income. Having your art showcased in a public domain and getting paid for it to boot, is what is so exciting about this venture.”

With some sought after prizes and unavoidable fame up for grabs, Springleap really is going all out to showcase its winners. With each Springleap t-shirt you buy you receive a postcard featuring the design plus the designer’s bio, a bookmark showcasing all the other designs of the month - in case you decide to buy another T-shirt for your collection - and your t-shirt, featuring the designer’s name on the back. And if you’re truly a fan, you will most likely want to order a limited edition poster featuring your favourite winning design.

T-shirts will cost R183 inc. VAT and courier costs. Anyone can submit a design or join the community and best of all, it’s free! Themed competitions, submissions for slogans and additional prizes are all in the pipeline. Go to www.springleap.com for more.

Taste Holdings, the AltX-listed restaurant company, was evaluating opportunities outside the country to expand its Scooters Pizza brand, but nothing had been finalised, chief executive Carlo Gonzaga said yesterday.

May 7, 2008

By SLINDILE KHANYILE

Durban - Taste Holdings, the AltX-listed restaurant company, was evaluating opportunities outside the country to expand its Scooters Pizza brand, but nothing had been finalised, chief executive Carlo Gonzaga said yesterday.

Previously, Taste has turned down anybody who approached it with the idea of taking any of its brands to another country without even considering the proposal. But Gonzaga said this had changed because the company was strong enough to explore the possibility without jeopardising local operations.

“The problem when you go overseas is that you lose focus,” he said. “But we believe Scooters is well resourced and has a strong leadership which can look at these new opportunities without defocusing on South Africa.” The company had received inquiries from other African countries and the UK.

Taste, which also owns Maxi’s and recently entered the jewellery market with the acquisition of NWJ, competes with the likes of Famous Brands and Spur, which have had a presence beyond South Africa’s borders for years.

Yesterday the company said revenue grew 15 percent to R33.8 million in the year to February. Headline earnings shot up 28 percent to R10 million, while headline earnings a share rose 21 percent to 8.3c.

Gonzaga said organic growth and new outlets had helped the company to grow despite high food inflation and interest rate hikes. “Consumers are hard pressed, but people are still buying convenience. People are buying down into Maxi’s from high-service restaurants. It is not about buying cheap, but getting good value for money.”

The revamping of Maxi’s stores that began in 2006 was starting to pay off. Revamped restaurants and those opened with the new look had performed above expectations. During the year, Taste had opened 26 outlets. It expected to launch at least 16 in the first six months of the new year. The company now has 161 outlets.

Apart from NWJ, it has bought BJ’s restaurants at Caltex forecourts on highways. These will be converted into Maxi’s during the year.

Gonzaga said the new year would continue to be challenging. There would be some casualties in the market, particularly from the independent operators’ side. But Taste would weather the storm.

Taste shares rose 7.27 percent to 59c yesterday.

European retail sales declined 1.6 percent from a year earlier in March, the most since at least 1995 and twice as much as economists forecast, as soaring fuel and food costs sapped consumer spending.

May 8, 2008

By Fergal O’Brien and Ben Sills

Dublin and Madrid - European retail sales declined 1.6 percent from a year earlier in March, the most since at least 1995 and twice as much as economists forecast, as soaring fuel and food costs sapped consumer spending.

The drop in euro zone retail sales was the largest since the data series began more than a decade ago, the EU’s statistics office said yesterday.

From the previous month, sales declined 0.4 percent. Economists had forecast a 0.7 percent annual decline and a gain of 0.2 percent from February, according to Bloomberg surveys.

A doubling of crude oil prices in the past 12 months and soaring prices for food such as wheat and rice have undermined consumer sentiment across the 15 nations that use the euro.

The European Central Bank (ECB), which meets today to decide on interest rates, has refused to follow its counterparts in the US and the UK in lowering borrowing costs as inflation surged since August, reaching a 16-year high of 3.6 percent in March.

“This is pretty grim,” said Ken Wattret, a senior economist at BNP Paribas in London. “The big picture has been very weak for some time and up until this point the ECB has been in denial. They keep on cheerleading the improvement in consumption, but it simply hasn’t happened.”

The euro extended losses following the retail sales report. It traded 0.7 percent lower at $1.543 at 1pm in Brussels.

Retailers had “never before faced so many challenges”, Jose Luis Duran, the chairman of Carrefour, the world’s second-biggest retailer, said on April 9. “Inflation is a big issue.” He added that the increase in costs was outstripping the gain in prices charged by retailers.

Ikea chief executive Anders Dahlvig said the same day that the home furnishings seller was cutting back expansion plans as economic growth slowed and prices increased.

Even unemployment at a record low has failed to spur spending. Confidence among households in France dropped to a record low last month, while a European Commission index of sentiment in the euro area declined.

Retail sales in France fell 0.8 percent from a year earlier in March, the EU report showed. Sales in Germany, which is Europe’s biggest economy, dropped 1.1 percent.

In February the EU statistics office reported that retail sales fell a record 2 percent from a year earlier in December. This figure has been revised to a 1.3 percent drop.

African Bank Investments Limited (Abil) said yesterday that it had stopped the controversial practice of “upfront” accounting at its Ellerine acquisition, putting further pressure on furniture rivals the JD Group and Lewis to follow suit.

May 8, 2008

By Tom Robbins

Cape Town - African Bank Investments Limited (Abil) said yesterday that it had stopped the controversial practice of “upfront” accounting at its Ellerine acquisition, putting further pressure on furniture rivals the JD Group and Lewis to follow suit.

Upfronting involves substantially accounting for insurance revenue on consumer loans when they are written as opposed to over the course of the loan when insurance premiums are received.

Abil chief executive Leon Kirkinis said the bank had applied “conservative” accounting policies as it wanted to be upfront with investors, giving them a true base from which to measure the acquisition.

In terms of note IFRS3, accounting standards acquirers were compelled to re-evaluate a target’s assets and liabilities, said Kirkinis.

Some assets had been boosted but overall there was a net R818 million fall in net asset value to R4.6 billion.

Included in this Abil had elected to stop “upfront” accounting for loan insurance and administration fees that were payable over the life of a loan.

Kirkinis said there was no guarantee that revenue from fees such as insurance would be paid when loans were granted, so Abil preferred these fees to only be counted when they were actually collected. This had resulted in a “front-end skewed income profile”.

The bank said it had factored this in when it made the offer last year. It had reversed insurance assets by R628 million as a result.

The mass market lender’s new approach will stimulate further investor questions about the way furniture rivals the JD Group and Lewis account for their loan books.

Evan Walker, a retail analyst at RMB Asset Management, said accounting for insurance fees upfront, that were earned over the course of a loan distorted revenue.

Walker said the Abil policy was an improvement in disclosure and called on the JD Group and Lewis to follow suit.

A second analyst who asked not to be named expressed outrage that accounting for revenue before it was earned was continuing in the sector.

But Abri du Plessis, the chief investment officer at Gryphon Asset Management, did not expect the JD Group and Lewis to follow suit.

Du Plessis said investors simply needed to understand the accounting policies of firms before putting in their money.

Neither Lewis nor the JD Group were prepared to comment on their accounting policies. Both are in closed periods.

Kirkinis also said Abil overpaid for Ellerine by R450 million after finding bad debts in the furniture retailer’s loan book to be higher than expected when it re-evaluated the business.

But Kirkinis said the value was “small in the context of a big transaction”, worth R9.16 billion.

Abil said the net asset value of its Ellerine acquisition was R450 million lower than anticipated after applying its more “conservative” accounting policies to the furniture retailer’s loan book.

The bank said after gaining access to Ellerine’s historical lending models and collection data on January 7 it had found it probable that loans made by the retailer to customers would “rise sharply”.

Abil shares yesterday lost 3.14 percent to R25.50. The general financial sector eased 0.70 percent

South African drugs and cosmetics retailer New Clicks said on Thursday first-half diluted headline earnings per share (EPS) rose 25,8% helped by health and beauty sales despite a tightening economy. The company said headline EPS, the main profit gauge in South Africa, which strips out non-trading, capital and certain extraordinary items, was 67,8 cents.

South African drugs and cosmetics retailer New Clicks said on Thursday first-half diluted headline earnings per share (EPS) rose 25,8% helped by health and beauty sales despite a tightening economy. The company said headline EPS, the main profit gauge in South Africa, which strips out non-trading, capital and certain extraordinary items, was 67,8 cents. New Clicks said it expects full-year diluted headline EPS to the end of August to rise between 20% and 30%. “While the trading environment is expected to become more challenging with increasing pressures on consumer expenditure, New Clicks is a largely defensive business that is proving fairly resilient in the current economic climate,” it said. Sales for March and April had continued in line with the performance for the first half, it said. Half-year revenue grew 12,7% to R5,87-billion, with turnover from continuing operations up 13,1% at R5,64-billion. — Reuters

April 23, 2008

By Tom Robbins

Cape Town - Pick n Pay same-store volume sales were flat in the past year, a clear sign that higher food prices and interest rates have cut into better-off consumers’ spending on food and toiletries.

Chief executive Nick Badminton has already met finance minister Trevor Manuel to discuss how the retailer could “help” curb price rises.

But Pick n Pay will be keen for the ANC-led government to help defuse growing consumer anger over food prices among its constituency.

The ANC’s alliance partner, Cosatu, has held one protest in Johannesburg outside the retailer’s offices.

Soaring food prices around the world have been driven by growing demand for maize as a biofuel and higher consumption in emerging markets, something retailers have very little control over.

The protests come at a time when Pick n Pay is involved in a dispute with unionised workers over working conditions, ahead of wage negotiations that will be particularly tricky because of the rise in living costs.

Pick n Pay said yesterday its store inflation for the year to February was 9.4 percent and rising, against a national consumer price index for food of 11.3 percent. Average Pick n Pay selling prices on cheese were up 35 percent, maize up 25 percent and cooking oil us 22 percent, Badminton said at a results presentation.

The supermarket group has extended its limited policy of selling some basic items at cost to draw customers in.

Abri du Plessis, the chief investment officer at Gryphon Asset Management, said that by extending discounts on items that were mostly loss leaders anyway, the group was trying to pre-empt consumer anger.

Shoprite and Spar’s lower target markets meant they were better positioned than Pick n Pay for the buying down that came with tough times, he said.

Badminton said trading margins had increased from 3.2 percent to 3.3 percent, but this would not go up in the current year. “I don’t think anybody can be unhappy with a 3.3 percent trading margin.”

While the supermarket group’s same-store volume sales were flat, rand turnover was 15.4 percent higher at R45.38 billion, after taking into account inflation and 46 new stores, to give a total of 753.

Headline earnings per share (heps) were up 10.1 percent to R1.98, excluding last year’s mostly once-off write-off of the Score chain’s deferred tax asset.

Chairman Raymond Ackerman said this figure most accurately reflected profitability.

Including the write-off, heps were up by 16.7 percent.

The company said capital expenditure on refreshing its brand, including new convenience dinners as well as new distribution, had held back profit growth. It expected to fully realise the benefits in the 2010 financial year.

The share lost 0.65 percent to R29.20. The food and drug retailing sector lost 1.02 percent.

By Tom Robbins

Cape Town - Less than half the detergents Pick n Pay ordered from multinational Unilever arrived in time, the supermarket chain said yesterday.

This was “unacceptable” given that consumer spending had been growing for a while.

Paul Connellan, Pick n Pay’s food merchandise director, said that while Unilever South Africa’s food delivery strike rates were higher at about 72 percent, “this is also pathetic”. Good suppliers had a strike rate of 95 percent.

Connellan said it was understandable that suppliers had initially underestimated growth in the consumer economy. But demand had now outstripped supply for three years.

Detergents manufactured by Unilever SA include the powerful Omo and Sunlight brands, which are believed to be highly profitable to both Unilever SA and supermarket groups.

Unilever SA said it was increasing capacity across all manufacturing sites. But it “acknowledged that there had been teething problems in commissioning new equipment”.

Last month the manufacturer said that for every job in its 4 000-strong South African workforce, another 22 workers in the supply chain depended on it for some part of their livelihood.

Had the company increased capacity more efficiently, that figure might well have been even higher.

Unilever SA chairman Gail Klintworth said yesterday that last year’s growth “was six times higher than our forecast” due to growing demand from a burgeoning middle class.

Shoprite chief executive Whitey Basson complained last year that supplier strike rates had fallen in this country. Suppliers were losing out to competitors in the rest of Africa.

Connellan said AVI’s strike rates were poor in the biscuit category at 60 percent. But last month, AVI said problems in expanding its Durban biscuit factory had been resolved.

Pioneer Foods listed on the JSE on Tuesday to help raise R1.2 billion for capital expansion so it could catch up with consumer demand. Pioneer said it risked not being considered a serious player if it did not ramp up production.

But Klintworth said the rising cost of living made the outlook for growth in demand uncertain. “With inflation increasing at a rapid rate, we will need to monitor what impact it will have on growth, for business planning purposes.”

Pick n Pay said there had been a big improvement in supplies from dairy processors, following shortages a year ago.

The retailer has previously said the country’s biggest food producer, Tiger Brands, had fallen short in production, but did not name the firm yesterday.

Spar group merchandise executive Mike Prentice said yesterday that the company had up to 6 percent more out of stocks than six months ago, but that it took time for manufacturers to add capacity.

Pick n Pay shares gained 2.82 percent to R29.80 yesterday. The food and drug retailers sector rose 0.99 percent.

Cashbuild had managed to reverse declining volume sales after it “took corrective action” on core product lines, particularly cement and bricks, the chief executive, Pat Goldrick, said yesterday.

April 25, 2008

By Tom Robbins

Cape Town - Cashbuild had managed to reverse declining volume sales after it “took corrective action” on core product lines, particularly cement and bricks, the chief executive, Pat Goldrick, said yesterday.

Goldrick said this action to grow profitable market share at the retailer had been positive.

Same-store volume sales in the three months to March were up 3 percent, compared to the same period last year. Volumes had declined 10 percent in the six months to December.

Goldrick said there had been no shift in the sales mix strategy towards lower rand-value items.

Comparable-store rand-value sales were up 14 percent for the quarter. Sales including new stores rose 19 percent.

The company targets lower-market home renovators in rural and urban areas. Despite a decline in the number of new houses built for higher-market segments due to rising interest rates, the government’s low-cost housing delivery is unaffected by this.

Brian Pyle, a portfolio manager at Old Mutual Investment Group SA, said it was a good volume growth figure in a tough market. But Pyle warned that since March, Cashbuild’s customers would have been hit by recent rises in the cost of living, including higher fuel and food prices. “The gas hasn’t hit the carburettor yet,” he said.

Pyle said it was likely that the building materials retailer had stolen market share in the three months to March. Cashbuild’s share price rose 7.1 percent to R57 on Monday, the day it released a trading update on sales figures.

The share price declined 1.09 percent to close at R55 yesterday at 5pm, while the sector lost 2.01 percent.