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Competition Commission approves transaction | Bolton Footwear & Beier Safety Footwear | bought Jordan & Co footwear divisions
January 2015

Major new SA footwear company

gets the go-ahead

In an unique transaction approved by the Competition Commission, family-owned Bolton Footwear and Beier Safety Footwear bought the Jordan & Co footwear divisions from listed company KAP Manufacturing. The two companies formed from the deal — one for fashion and comfort shoes, the other a new safety footwear company — will be major players in the South African footwear manufacturing and distributing market

The Competition Commission has approved one of the most unique deals of recent times in which two family-owned companies bought a former family-owned company from a listed company.

“Usually it is the other way round,” says Noel Whitehead, CEO of Jordan & Co, whose four divisions became part of Bolton Footwear and a new safety footwear company on October 1 last year. “I find the transaction unique because I don’t know of any other transaction where private money had been used to buy business from a listed company. Usually it is the listed company that buys the small family business.”

Two families — the Beiers and Boltons — used their private money to buy the four divisions out of the listed company, KAP Manufacturing, because they are passionate about local manufacturing and passionate about doing business in South Africa, he says.

Jordan & Co, founded by the Jordan family in Wellington 115 years ago, can identify with that philosophy and company culture.

To add spice, SKN Corporation, the safety footwear division of the multinational Rahman Group of India, also became part of the group, which will consist of two separate companies — Bolton Footwear consisting of Civilian fashion and comfort footwear, as well as a safety footwear company, which is provisionally named Thunderflex 102.

The four former Jordan & Co divisions are now split between the new companies: Anton Fabi, Bronx, Jordan, Olympic and Renegade fashion and comfort shoe brands became part of Bolton Footwear. Bronx safety footwear will in time be incorporated into the safety footwear company.

Safety shoe supplier United Fram Footwearand gumboot supplier Wayne Plastics, based in Johannesburg, have joined Bagshaw (formerly part of Bolton Footwear) and Beier Safety Footwear in the new Thunderflex 102 company, of which the Bolton and Beier families, as well as the Rahman group, are the shareholders.

The Rahman Group became the majority shareholder of the fourth Jordan division, Mossop Western Leathers in Wellington, with Bolton and Beier Safety Footwear as the other shareholders.

Jordan & Co joins Watson Shoes and Barker Footwear in the fashion and comfort shoes Bolton Footwear group.

Fashion and comfort shoes

Watson Shoes, owned by the Bolton family, has been operating out of Great Brak River for the past 128 years and is known for brands like Grasshoppers, Franco Gemelli, Step-on-Airs, Watson, Young Klinik, Dr Hart, etc. They manufacture about 10 000 pairs of shoes per day at their four factories in Great Brak, Oudtshoorn and Cape Town. The original factory in Oudtshoorn, where their ladies footwear is manufactured, is now owned and managed by ex-employees from previously disadvantaged backgrounds.

Barker Footwear, which has been manufacturing Barker men’s leather shoes for more than 80 years and Crockett & Jones shoes for more than 60 years, was bought by Bolton Footwear about 18 months ago.

Whitehead, who became CEO of the KAP Manufacturing Footwear Division in January 2014 and took over as MD of Jordan & Co when Brian Pollock retired in August, will be the CEO of Jordan & Co.

In the interim he will still be involved with Bronx Safety and Mossop Western Leathers, which is a major supplier to the footwear industry, but is withdrawing from the safety divisions as their integration into the new company progresses.

He and Johan Kriel, CEO of Bolton Civilian Footwear (formerly Watsons) and Barker Footwear, will report to MD Alan Fleetwood, who is in the process of relocating to the Jordan head office in Cape Town.

With companies operating across the country — in Cape Town, Durban, Johannesburg, Great Brak and Oudtshoorn — it is logically much easier for him to be based at the Jordan offices in Cape Town than in Great Brak River. It will also give him an opportunity to learn more about the Jordan & Co operation.

But, stresses Whitehead, structures may change in time, as they have barely had time to discuss them, because their first priority was to establish and get the new safety company up and running.

One thing that will not change in the forseeable future is the identity, marketing and distribution of the brands — except where they have gaps to fill. Jordan will, for example, be appointing a brand manager for Bronx, temporarily managed by Brian Pollock, and finding a new manager for Olympic when Miles O’Brien retires in February. Apart from that, brand management will continue uninterrupted.

“We have a stable of very strong brands and it is important that they all maintain their identities,” says Whitehead. They will therefore not be amalgamating the brands in one division as “the look feel and touch of the brands may become the same. You want the brands to be totally different, because people want choice.”

While there might be some overlap, they will ensure that each brand maintains the unique features that attract followers ... for example, while there might be some similarities between some Bronx or Grasshopper styles, a customer buys a Bronx or Grasshopper shoe because he loves that particular brand, says Whitehead.

Share resources

But, they will optimise resources because “there are a few things we’d like to do from here (Cape Town),” he explains.

They might, for example, utilise their well-manned office in China and imports department in Cape Town to manage the imported ranges for Watsons. It will also simplify logistics to distribute all the imported ranges out of Cape Town, rather than transporting them to the offices in Great Brak first.

They might also optimise production capacity. For example, if one factory has spare capacity on the welted side, and another is over extended, they will try and balance the loads.

He again emphasises that they have not had time to discuss and plan all future strategies and that many decisions still need to be taken.

“The last few months have been hectic!” says Whitehead. “It was the sale of a business, not just a company, which meant that all the bank accounts and customer accounts had to be changed and updated.”

Local manufacturing

Another thing that will not change, is Bolton Footwear’s commitment to local manufacturing — if anything, it will become stronger, assures Whitehead. “In future, there will be a big emphasis on local manufacturing.”

While Watsons mainly manufactures locally, with some imports, and Barker fully manufactures locally, Jordan imports about 80% of their footwear and manufacture about 20%. They currently manufacture about 2 400 pairs per day, about a quarter of the output achieved by the other factories.

While it is not possible to compete against China with cheap synthetic imports, they can compete on the manufacturing of good quality leather shoes — for which there is a growing demand because South Africans are growing tired of cheap imports, says Whitehead.

Other factors like a quick response time, a short time to market — days instead of months — the ability to make small orders and increase or reduce orders, contribute to the appeal of local manufacturers.

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