Lansdowne Clothing factory auctioned off

Posted On Tuesday, 20 February 2001 03:01 Published by eProp Commercial Property News
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The assets of one of Cape Town's largest clothing and knitwear manufacturers, which was placed under liquidation with a loss of 400 jobs and debts of R16.5-millionis to come under the hammer shortly.

 

Jonathan Smiedt Danco Clothing, based in Lansdowne, is the latest in a series of recent high profile liquidations, which have resulted in hundreds of job losses in the local industry.

About 35 000 people are employed in the Cape Town's garment industry, with exports growing by a third since 1997, reaching R453-million in 1999, according to Wesgro.

The assets of Danco will be sold without reserve at the factory during a two-day auction on the spot, on February 28 and March 1, according to Jonathan Smiedt of ClareMart Auctioneers.

Coming under the hammer will be Danco's massive manufacturing complex situated in Lansdowne Industrial, sewing machines and plant, fabric, office furniture and equipment, as well as several cars and trucks. 
Danco, which had the well-known French Connection line of clothing as its main label, had been in business since 1976 before it was placed under provisional liquidation on November 22 last year. 

According to Chris van Zyl, of Progressive Administration (Cape) Pty. Ltd (joint liquidators of the matter), Danco had liabilities of just under R16.5m and assets of almost R14m at the time of the liquidation.

Smiedt says that he hopes to realise between R3m to R4m at auction. But van Zyl says that the company had an order book and work in progress worth around R10m.

"We retained the service of a lot of the staff to complete this work. This has now been completed and we closed the doors of the factory last week," says van Zyl. "We were also able to sell the forward order book and materials, leading to the employment of some staff by the companies who had bought the order books."

According to papers filed at the time of the liquidation, the main reason for seeking the court order was that Edgars, one of Danco's biggest clients had 'changed its buying patterns and commenced its own supply line.' 
This had resulted in a 45 percent drop in turnover, forcing the company to scale down its operations. The company had paid out R1.5m in retrenchments and relocations costs to workers.

The general retail market had also experienced a serious downturn and trading had become highly competitive, resulting in the company experiencing a cash flow problem, which had led to the liquidation application, the court was told.

 

Last modified on Tuesday, 10 June 2014 13:31

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