Industry news

Replica market in turmoil

The retail market for team replica was thrown into turmoil when empowerment group Brimstone Investment Corporation announced the voluntary liquidation of Canterbury International SA (Pty) Ltd at the end of January — a week before the start of the FNB Varsity Cup, a few weeks before the start of the Super 14 rugby season, in the middle of the current PSL and cricket seasons and four months before the arrival of the British Lions.

Canterbury was, among others, the teamwear sponsor of Super 14 teams Cheetahs, Golden Lions and Sharks, all eight university rugby teams competing for the Varsity Cup, and recently signed PSL team Santos, as well as four of the six professional cricket franchises — Nashua Titans, Chevrolet Warriors, Nashua Dolphins and Nashua Cape Cobras.

And, as everybody knows, they were the exclusive licensees for Springbok rugby supporter’s wear and replica.

The liquidation meant that retailers started the year without supporters and replica stock to sell to keen fans eager to sport the colours of their favourite teams, and with no clarity on when, or if, they would be receiving stock.

This came after retailers were already short of stock as they were unable to supplement stock over the Christmas period because the SA Revenue Services (SARS) closed Canterbury from December 18th 2008 to January 14th 2009 for an unannounced audit.

Canterbury International SA is one of the three companies formerly jointly-owned by Dave Linder and House of Monatic (HoM) that were placed in voluntary liquidation after SARS briefed Brimstone that possible serious financial and criminal irregularities were uncovered in the audit by Customs and Excise. The other two companies are O’Neill South Africa and Fifth Element Marketing.

Brimstone subsequently instructed their lawyers to instigate a full forensic investigation and applied for liquidation of the companies.

The liquidation of Canterbury has far-reaching implications for the many retailers who rely on replica sales; local sponsored athletes who have reportedly not received payment for months (but subsequently switched sponsors); teams who are unsure if they will have kit to play in during the rest of the season; and the sales agents who are unsure if they will be paid for orders written.

Canterbury’s deal with the sponsored teams was that they would supply everything from bags, tracksuits, practice wear, several sets of playing kit etc. and while the team had received some kit, they became concerned when they did not have everything as kick-off time approached. The Golden Lions Rugby Union, who had not received their full playing kit four days before their first Super 14 match, subsequently approached Gilbert to become their teamwear supplier. The Cheetahs followed suit.

The liquidators, Progressive Administration, allowed some of the supporters’ wear stock to be distributed the week before the start of the Super 14 series, but the day before the first game, none of the retailers countrywide had received stock from Canterbury.

(Mind you, prominent Cape Town retailers had not received Stormers’ shirts from adidas two days before their first game either!).

The changes to the Springbok jersey — the giant Protea now on the left breast, a Springbok jumping over a ball on the right, CCC logo in the middle and SASOL across the mid-riff — means that retailers will not be able to sell old stock of the replica Springbok shirts. Apart from customers demanding the latest shirt (as retailers found out when shirt designs were changed in the past), there will be legal ramifications if the old shirts are sold, because SRSA will lose out on royalties paid for the use of the Protea logo.

Several retailers expressed concern about time running out for placing orders in order to obtain enough stock to meet the expected fan frenzy for Springbok jerseys when the British Lions arrive for their tour at the end of May.

This is an understandable concern, as retailers had in the past borne the brunt of customers’ complaints when the supporters’ wear arrived late (sometimes only at the end of the season) or their orders were cut by the supplier due to increased demands before major events like the Super 14 or Currie Cup finals — and most notoriously, the IRB Rugby World Cup final when the unprecedented demand resulted in a total sell out countrywide.

Not only did the retailers lose out on potential sales, and had to deal with customers accusing them of bad service, but the doors were opened wide for counterfeiters who sold to fans eager to buy anything vaguely resembling their team’s colours. One observer claims that 90% of the “Cheetah” shirts worn by fans at the Currie Cup final in Bloemfontein were fakes.

By the time we went to press Canterbury International in the UK (in charge of Africa), had still not made a decision about the future Canterbury supplier in SA. A delegation from Canterbury International was coming to SA to meet with candidates keen to take over the distributorship.

This will be a tough decision, as the new distributor will not only have to regain sponsors’ confidence, but will also have to convince retailers that they will be able to deliver sufficient stock on time.

In the past, most of Canterbury’s supporters’ wear had been imported and the new distributor will have to renegotiate with suppliers — and probably find new suppliers outside China, or change to local manufacturing, in order to comply with import quota restrictions.