Truworths CEO Michael Mark has hotly denied trade union claims that the retail chain is increasing cheap imports at the cost of local manufacturing jobs.
“We find it very frustrating that they are targeting us in this way when we have done so much to ensure we import as little as possible, while other retailers have not,” said Mark.
“It does not make sense when Cosatu [the Congress of South African Trade Unions] and [the Southern African Clothing and Textile Workers’ Union] acknowledge that we already meet the criterion of 75% local product.”
This is the second attack in recent weeks on Truworths’s local procurement policy, after Proudly South African acting CEO Martin Feinstein criticised the chain for not signing up with the Proudly South African campaign. Feinstein quoted a Truworths executive as saying: “We only give consumers what they want. We don’t influence their tastes. And they don’t really want local fashion.”
Mark said he was “horrified” when he read the quote. “It goes against everything we stand for. We can’t imagine a senior executive or director of Truworths saying something like that. I believe most South Africans would choose a local product over an import.”
Mark did, however, stress that “being a retailer is not about dictating, a retailer anticipates consumers needs”.
In a statement ratcheting up the pressure on the chain this week, Cosatu said: “Truworths is not a Proudly South African company, in spite of claims to the contrary.” Cosatu said the level of imported goods in Truworths stores had been increasing.
The federation said Truworths had announced record revenue and profits to its shareholders at its AGM on November 4, and had generated a pre-tax profit of almost R1,8-billion in the past three financial years.
In the same period the clothing and textile industry had lost 44 000 jobs, including 12 000 between January and September this year.
“These were lost largely as a result of radically increased imports of clothing and footwear, which decimated the local industry,” said Cosatu’s Patrick Craven.
“The local clothing manufacturing industry is capable of supplying a wide range of good quality products that were always good enough for Truworths before the strong rand created the opportunity for massive profits through imports,” he added.
Mark disputed this: “We do not agree with the claim that we are growing our imports as a proportion of our businesses. We’ve done a lot of analysis of our product lines and we think that about 80% of our products are locally manufactured.”
Mark said massive job losses in the industry were an “incredibly worrying and concerning issue” for Truworths.
“The reason we are such a low importer is that we have a large variety of small runs; it is not suitable to import that kind of product. Asian suppliers prefer orders of long runs. The local industry is more flexible because they are on your doorstep, they work with you and their reaction time is much quicker.”
Truworths, Edcon, Woolworths and Foschini refused at the last minute to sign a longer-term “buy local” agreement negotiated at the National Economic Development and Labour Council (Nedlac) in June this year.
This sought a two-year commitment from retailers, after an initial six-month agreement was signed in December 2003.
Mark said Truworths already met the required target of 75% local product imposed by the Nedlac agreement. However, the company felt a two-year commitment could put the business at risk.