Author: My Office News

Source: IOL 

Edcon Holdings said on Thursday that it will be closing three of their chains: Boardmans, Red Square and La Senza lingerie.

This is the latest strategy to save the company after dwindling sales and profits.

By shutting down the other chains they hope to attract more customers to their flagship Edgars stores.

The decision to shut down certain chains comes from the newly appointed CEO Grant Pattison who took over the position fro Bernie Brookes. Edcon is South Africa’s largest non-food retailer.

The Johannesburg company has had a hard time staying afloat amid weak consumer spending and economic growth and in 2016, the company had to be taken over by banks and bank holders to stop it from collapsing.

Under Pattison’s plan, Edgars will cut down on more than 1 300 stores’ footprints as well as reduce floor space by 17% over the next five years to increase profitability.

They will also be focusing on Edgars mainly, which sells most of the of the items that are available in the stores that are being shut down.

Other stores that have made the cut include CNA and Jet.

Pattison said that he thinks that the company can turn. He said, “The quicker we can do this, the better”.

Debt

The urgency to make changes comes after Edcon retail sales dropped by 9,4% in three months through December 23 while adjusted earnings before tax, taxes depreciation and amortisation declining by 25%.

The owners of Edcon Holdings are Frank Templeton Sanford C. Bernstein & Co. LLC and Harvard University Pension Fund. They took over when Edcon was struggling under foreign-currency debt that was used to finance the takeover by Bain Capital Private Equity LP in 2007.

The 89-year-old company also employs 14 000 permanent a significant number in a country where more than 1 in 4 people are unemployed.

At the of last year, the company’s net debt was R4,2 billion. Some of the other attempts to revive the company include increasing the workforce, decreasing prices and bringing in international brands.

Edcon said earlier this year that they were in talks with creditors about refinancing debt to strengthen the balance sheet. Edcon also has liquidity facilities and credit facilities that will be maturing towards the end of 2018.

By Warren Thompson for Business Day 

The South African Reserve Bank painted a grim picture on Monday that suggests as much as 75% of VBS Mutual Bank’s assets may have been stolen by its executives and directors.

“It’s a travesty that the failure of management put so many depositors at risk,” said Bank governor Lesetja Kganyago, at a media conference on the curatorship of VBS.

“Institutions such as banks rely on the governance processes, but when it’s the people responsible for the bank that are the ones perpetrating the crime, no amount of regulation can prevent that,” he said.

VBS, which was formed as a building society in the former Venda homeland, came to national prominence in 2016 when it gave former president Jacob Zuma a R7.8m loan after he was ordered to repay the state for upgrades made to his Nkandla home.

The bank’s failure may yet have grave consequences for municipalities in some of the poorest parts of the country, which stand to lose almost all of the R1.6bn they deposited with VBS, increasing the risk of budget shortfalls and violent protests that could result from a lack of service delivery.

Curator Anoosh Rooplal’s timing of the action he instituted on Friday to recover more than R1.5bn from the bank’s largest shareholder, Vele Investments, as well as from the bank’s executives and directors, was done to prevent further “dissipation of assets”.

But the amount of money stolen relative to the bank’s total assets is harder to establish, partly because the bank deliberately misled the regulator and also due to problems with the quality of its audit, which led the bank to withdraw its 2017 financial results.

Rooplal did not rule out seeking damages from the bank’s external auditor, KPMG, and the bank’s internal auditor, PwC, when the forensic report is completed towards the end of August.

According to the bank’s last available annual financial statements to end-March 2016, the bank had total assets of just more than R1bn.

By the end of January 2018, according to data provided by VBS to the Reserve Bank, the bank held total assets of R2bn, meaning it had doubled its balance sheet in the space of two years.

When asked what, if any, part of VBS’s loan book was performing, the curator said that the home loan mortgage book of about R400m was behaving consistent with credit extended under arms-length credit agreements.

The performance of the vehicle finance book was mixed, with the curator noting a deterioration in the credit quality in the months leading up to the intervention by the Reserve Bank.

Based on a balance sheet of about R2bn, and with the curator seeking to recover R1.5bn from the “perpetrators of the fraudulent scheme”, it seems possible that as much as 75% of the bank’s balance sheet has disappeared.

Retail deposits

But there was relief for small depositors, with the Reserve Bank announcing that it has obtained a guarantee of R330m from the Treasury should it fall short in recovering the money owed to them.

The Bank announced last week that retail deposits, which include individuals, burial societies and stokvels, would be guaranteed to a maximum of R100,000 per customer.

This means that 97% of all depositors at the bank will be refunded their entire savings.

Business confidence worse than in 2017

By Asha Speckman for TimesLive

The economy was unlikely to shake off anaemic growth in the second quarter of this year‚ economists said on Tuesday after a dip in the South African Chamber of Commerce and Industry (Sacci) Business Confidence Index confirmed their concerns.

The Sacci Business Confidence dipped to 93.7 index points in June from 94 index points previously. The index has slipped each month from a high of 99.7 in January this year.

John Ashbourne‚ Africa economist at Capital Economics said: “The latest drop strengthens our view that South Africa’s economy remained weak in quarter two.”

Economic growth contracted by 2.2% in the first quarter of this year after a stronger finish in 2017.

The Sacci index is a measure of business activity and is based on several indicators including energy production‚ trade figures and the performance of financial markets.

Seven of the thirteen sub-indices reflected negativity in the business environment.

The largest negative influences were the weaker rand exchange rate‚ lower real retail sales‚ a decline in the value of building plans passed and higher energy costs.

A rise in merchandise import and export volumes and new vehicle sales impacted positively.

The risk of a global trade war and potential knock-on effects also weighed negatively on the outlook from certain industries in South Africa‚ the survey noted.

Ashbourne anticipated further clarity when mining and manufacturing production and sales data for May are published on Thursday.

Weakness in these sectors is‚ however‚ expected to continue. The recent Absa purchasing manufacturer’s index‚ which measures activity in the manufacturing sector‚ dropped to 47.9 index points in June from 49.8 in May.

The index reading was 50.9 in April. A reading below the 50 neutral mark indicates a possible slowdown in business activity.

Lara Hodes‚ an economist at Investec‚ said about second quarter growth: “We’re not expecting positive news.”

Hodes said growth in mining was tempered by continued uncertainty over the mining charter and a restrained investment.

Investec expects an improvement to -3.5% for mining in May compared to -4.3% previously. It has forecast manufacturing to be -1.4% from 1.1% in April compared to a BNP Paribas expectation of 0.1% growth from 1.1% previously. However‚ Hodes said retail trade sales and consumer confidence data to be released next week would complete the picture.

Ashbourne said the potential slowdown had prompted London-based Capital Economics to temper its growth forecast for the year to 1.3% from 2% previously.

National Treasury has forecast 1.5% for the year and the Reserve Bank expects 1.7%.

Sacci said: “It has become imperative that structural economic matters hampering inclusive economic growth should be addressed with economic rationality. Uncertainties surrounding economic policy direction and position should be clarified so that investor and business confidence can reaffirm itself.”

Sitting is the new smoking

Recently it was widely reported in the media that all employees at Apple’s new spaceship-style headquarters in Cupertino, California would be getting desks that give them the option of working sitting or standing – a trend that is rapidly catching on in South African offices too.

Richard Andrews, MD of Inspiration Office, says that rapidly increasing numbers of their clients are asking for new desk installations that can accommodate workers who prefer to mix up the work day by standing and sitting.

“In the past year we have had a nearly 50% rise in demand for desks that give office workers the choice of sitting or standing,” says Andrews.

He adds that the financial services and insurance industries in South Africa in particular have jumped on the trend, with some firms replacing the workstations for every staff member.

“The return in efficiency in having staff that are able to adjust their posture at the push of a button, has more than outweighed the capital expenditure. In our experience height adjustable workstations are a simple way to provide for the well-being of an organisation’s most valuable asset – its people.”

Sitting all day is seen by health professionals the world over as the new smoking. Sitting is killing people slowly by taking a huge physical and mental toll on the mind and body. Often workers sit for eight to ten hours a day which is a dangerous habit.

Research shows that sitting for long periods of time contributes to risk of metabolic syndrome, musculoskeletal disorders, heart attack and stroke risk and overall death risk, among others. Those who sit a great deal also have lower life expectancies and slower metabolism.

Dr. Hidde van der Ploeg, a senior research fellow at the University of Sydney’s School of Public Health in Australia, found that sitting for 11 or more hours per day increased risk of death by 40%, regardless of other activity levels.

“People mistakenly think they can shrug off the effects of a long day by hitting the gym after work but you can’t,” Andrews warns.

So how can office workers protect themselves?

1) Ask for a standing desk and set it to the right height. “There really is no need to stand all day. Ideally though, at least every other hour, workers should work standing for an hour,” Andrews advises.

2) Office laps. Talking a walk around the office or even outside if time permits helps combat the strains of sitting. Try and walk at least every hour.

3) Active meetings. “Most meetings are too long anyway. Taking a loop around the block while talking to colleagues will get the circulation going and shorten the meeting.”

4) Desk exercises. Stretching your arms and legs at your desk are a simple way to keep moving even while you’re seating. Arms reaching for the sky and extending legs forwards help improve circulation.

5) Set reminders. Increasingly smart watches can detect if the wearer has been sitting too long and sends an alert to the user to get up and move around. “Alternately a colleague buddy system of reminders is a good way to remind yourself to get up move every hour,” says Andrews.

He adds the typical sit/stand desk look exactly the same as normal desks but come fitted with a lever or button on the side. All workers need to do is simply flip the lever and adjust the desk to a comfortable standing height and the reverse to set it back to sitting desk level.

Bullet journalling drives stationery sales

By Tori Linville for Gifts and Dec

A journal is one of the most personal items someone can own, and the trend of bullet journals skyrocketed in the past year, driving sales of traditional stationery supplies like writing instruments and notebooks, according to The NPD Group.

The bullet journal was deemed “the analogue system for the digital age” by creator Ryder Carroll, and has seen more than 2-million Instagram posts relating to the trend.

Last year alone, consumers spend almost $210-million on unruled spiral, composition, graphing and other kinds of notebooks – 18% more than the year before.

Writing instruments that are often seen being used for bullet journals saw growth in sales as well: colour markers saw a 17% increase, paint markers had a 9% increase, permanent markers saw a 6% increase, gel pens increased by 6% and porous pens increased by 5%.

“Today’s continuously evolving digital transition makes for challenging times in the office supplies industry, but there’s still plenty of opportunity for traditional products to spark interest and maintain relevance,” says Tia Frapolli, president of The NPD Group’s Office Supplies practice.

“As bullet journalling and its close relative hand lettering are the most recent trends to emerge, it’s clear that notebooks and writing instruments remain important to consumers’ lives in terms of creativity, self-expression, and productivity.”

Facebook glitch unblocked your blocked list

By Emily Price for Fortune

If you’ve ever blocked anyone on Facebook, the social network may have accidentally “unblocked” that person on your behalf.

A bug that was live between May 29 and June 5 allowed blocked users to see the profile pages of people that blocked them and send them messages through Messenger, Facebook revealed Monday. The issue affected more than 800 000 users on the platform. About 83% of those Facebook users had one person they blocked essentially unblocked by the bug, while 17% had more than one blocked person unblocked during that time period, the social network said.

Facebook has contacted the users that were impacted by the issue.

It’s worth noting that the issue didn’t give previously blocked users full access to someone’s account. Instead, they would simply have been able to see things that were posted publicly on the platform. When you block someone on Facebook you also unfriend them (presuming you were friends in the first place). The bug did not reinstate any of those ended connections.

Facebook says that it has corrected the issue, and everyone who you previously blocked is now fully blocked again.

By Deena M. Amato-McCoy for Chain Store Age

Walmart is enhancing its new website with two new services that will streamline how customers browse and make purchases across its home furnishings offering. On Thursday, the discount giant will begin testing its 3D virtual shopping tour, a service that enables customers to virtually browse a curated apartment. The service features nearly 70 items from both national brands and Walmart’s private label offerings.

Walmart will also enable customers to buy a completely decorated room. In July, the discounter is launching “Buy a Room,” a service that will allow customers to add a group of items to their online shopping cart, and buy a complete look.

Initially, the service will highlight dorm living, and feature five curated collections. Each room will feature up to 20 of the most popular items college students need to outfit their living space.

“While we are launching these new features for dorm rooms and small space living, we know that they could have applications elsewhere and will continue to listen to customer feedback to determine how to implement them more broadly on the site,” said Anthony Soohoo, senior VP and group general manager, home, U.S. e-commerce, Walmart.

For example, Walmart plans to continue build out its home assortment, and plans to add a new coastal style, he added.

The new solutions are an extension of Walmart’s new digital home furnishings shopping experience. This is one of many elements featured on Walmart’s redesigned website, which was introduced in February.

Walmart’s new dorm room shopping experience comes on the heels of Amazon’s own push for the upcoming back-to school shopping season. On Wednesday, the online giant launched its redesigned “Back to School” and new “Off to College” stores, two concepts that feature low-priced classroom supplies and dorm room essentials. Both online sections feature a curated selection of merchandise, and streamlined searches to locate items.

By Phoebe Weston for MailOnline

Your private emails are being read by third-party Gmail app developers, an investigation into data privacy has revealed.

Developers behind a number of popular online services designed to work with Gmail trawl through private messages sent and received from your email address, it claims.

It is common practice for some of these third-party app creators to instruct employees to read personal emails.

One app, which is designed to help users manage their Gmail inbox, lets employees read ‘thousands’ of emails, the Wall Street Journal investigation found.

According to experts, this ‘dirty secret’ is now common practice among some firms.

The revelation comes just a few months after it was revealed political data firm Cambridge Analytica had siphoned private data from third-party apps on Facebook.

According to the investigation into Gmail, the hugely-successful Google email client allows third-party developers to scan the inbox of anyone who installs their app.

These apps can provide additional functionality to the Gmail inbox, like the ability to compare prices from different online retailers, or quickly unsubscribe from any marketing emails sent to your address.

The Wall Street Journal report was based on the testimonies of more than two dozen employees of companies who create services around Gmail – the most popular email service in the world, with 1.2-billion active monthly users.

By Eve Buckland for MailOnline 

Sony Pictures accidentally uploaded an entire film to YouTube, instead of the trailer on Tuesday.

A clip labelled ‘Khali the Killer: Official Red Band Trailer’ made its way onto the video sharing site, but when unsuspecting fans clicked on it, they were able to watch the entire movie.

The 89 minute upload of the crime drama, filmed back in 2016, featured the full credits and clocked up an impressive 11 000 views.

Sony Pictures only took down the entire movie more than six hours later.

The trailer has not reappeared online and the only clue to its once existence is a bizarre, broken link.

The grisly flick is slated to open in a few US theatres in August, and has already been released on DVD and Blue-ray in the Netherlands.

By Roxanne Henderson and Antony Sguazzin for Business Day

The Reserve Bank has written to the National Credit Regulator requesting a probe of loan-origination fees charged by Capitec, according to a person familiar with the matter.

The referral came after the issue was raised in a report by short-seller Viceroy Research in January, said the person, asking not to be identified because the matter is private.

The investigation is ongoing, the person said.

On Tuesday, Capitec shares were trading down 1.9% at R870.89 at 9.05am on the JSE.

Capitec chief financial officer Andre du Plessis said he was unaware of the central bank’s referral, or of an investigation by the Johannesburg-based credit watchdog.

In the report, Viceroy said Capitec’s income was boosted by excessive fees on its multiloan product, which carried a monthly charge for allowing a previously vetted customer to extend their facility by answering some questions.

While Capitec said it terminated the product in 2016 — after rules introduced by the NCR meant it was no longer viable — Viceroy said the lender rebranded it and that Capitec’s methods risk over-indebting consumers.

Capitec denied this, saying Viceroy did not understand how the product or its processes work.

The NCR had previously probed the multiloan facility and was satisfied with the fees and interest charged, Capitec said on February 8.

‘Very active’

Both the Johannesburg-based NCR and Pretoria-based central bank declined to comment.

The central bank monitors lenders for their compliance with rules ranging from their operations and capital levels to staffing and money laundering, with the ability to fine companies or revoke their licenses. The NCR can also administer financial penalties on lenders which violate the National Credit Act, legislation aimed at protecting consumers from becoming over-indebted.

Officials from the central bank and the NCR told MPs in March that many of the allegations made by Viceroy were not new and that not all of them were accurate.

“The Reserve Bank is very active in doing ongoing reviews at all the banks,” said Du Plessis, speaking more broadly on the regulator’s oversight. “If anything bothers them, they actually contact us or ask that we report on something. That happens on an ongoing basis.”

On Friday, Capitec announced it had reached an agreement with Summit Financial Partners, which was challenging the lender in court and before the NCR on behalf of six complainants.

The cases, which mostly centred on Capitec’s now defunct multiloan facility, were withdrawn.

Capitec’s stock has declined 19% this year, more than any of the other lenders on the six-member FTSE/JSE Africa banks index, which is down 5.6%.

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