Recent prevalent looting in two of the most crowded South African provinces caused substantial damage to around 1692 clothing stores. And major retailers sourcing impacted, as well as, the apparel sector and textile manufacturing.
Days of rioting and looting sparked by the arrest of former President Jacob Zuma spread throughout KwaZulu-Natal and Gauteng, which includes Johannesburg, home to some 27 million people.
According to the Consumer Goods Council of South Africa (CGCSA), more than 800 stores were looted and 100 burnt, in the week 12-16 July. Over 200 complete shopping centers were plundered and destroyed.
The CGCSA said around US$340 million worth of damage happened to the overall retail sector.
Michael J Lawrence, Executive Director of the National Clothing Retail Federation of South Africa said to media, “Everyone is frantically running numbers. We know about 1,000 closing stores were hit, from stores in shopping centres to street stores.”
The Mr Price Group, one of South Africa’s major clothing and home décor retailers, which includes Mr Price, Mr Price Sport, Miladys, Sheet Street and Power Fashion, with 1,592 stores countrywide, had 109 stores, or 7%, ‘entirely looted,’ the Durban-based company said. It has for the time being closed 539 stores.
Lawrence said the immediate concern was the security of distribution centers. Hammarsdale, a logistics, manufacturing and storage hub near the port city of Durban on the country’s main motorway, the N3, that runs to Johannesburg, was also targeted by looters.
“Hammarsdale is a deep concern, as there is still civil unrest. We are worried about the security of distribution centres,” said Lawrence.
The deployment of the South African National Defence Force following the unrest has largely restored supply lines, but Lawrence said it was still a challenge.
“There is a bit of a battle to get products out there,” he said.
Clothing and textile imports have been stuck by the brief closure of the Durban and Richards Bay ports, the primary import hubs for KwaZulu-Natal and Gauteng.
“It is an issue given how time sensitive the clothing season is,” said Lawrence.
While bigger retailers are expected to be able to recoup losses from insurance claims, it is smaller and medium-sized stores that will suffer to bridge the financial losses, added Lawrence.
There have been few reports on damage or attacks on garment manufacturers in Durban. One manufacturer, speaking on the condition of anonymity, said the business had been struggling before the COVID-19 pandemic, and was heavily impacted last year. The factory has been closed for the past two weeks.
“It has been a struggle to get employees into work, and to ensure their safety,” Lawrence said.
Fabric factories have however been hit, such as in the manufacturing hub of Newcastle in KwaZulu-Natal and other parts of the province. KwaZulu-Natal has quite a big manufacturing community. There are reports of losses at fabric factories with some completely decimated.
The disruption is expected to cause major job losses, further affecting the struggling economy with its highest unemployment rate, at 32.6%, since 2008.
“By the time consumers can access stores, what will have happened to household income? We don’t know what will happen when trading conditions normalise,” said Lawrence.