MANUFACTURING: New Buttons On A Tatty Old Coat
Recent Western Cape Business News
CLOTHING and textile conglomerate Seardel, which generated sizeable losses in the half-year to end December 2008, has relieved the ‘old guard’ of its duties and dressed the boardroom with sharp and smart new directors.
The sweeping changes at executive level follow a change in control at Seardel from the Searll family to empowerment group Hosken Consolidated Investments (HCI).
HCI underwrote a R300 million rescue rights issue in late 2008 to the tune of R250 million, which effectively gave the empowerment company outright control of the beleaguered clothing and textile company.
The first purge of Seardel’s old guard took place in October when Aaron Searll - the chairman (and former CEO), major shareholder and founder – retired from the board.
Shifting Searll, who started Seardel in the late fifties, away from the group arguably removes the major ‘legacy’ issue that might have stood in the way of an effective turnaround at the group.
There’s no debating that Searll, who turned a R500 investment in 1957 into a R4 billion a year business with 15 000 employees, must be commended for value creation and job creation over the last five decade.
But there might be a valid argument that the clothing/textile sector doyen had become too close to the business to be able to step away and take the hard decisions needed to effect a turnaround. There are more than a few observers that feel Seardel will need to look at closing unprofitable operations – especially on the thin-margined clothing manufacturing side.
Other stalwarts that have departed the Seardel boardroom include long serving financial director Arthur Jacobson and non-executive director Russell Upton.
Searll’s place as corporate figurehead was taken by HCI boss Johnny Copelyn, who becomes non-executive chairman. HCI’s commanding presence is reinforced with the appointment of a slew of new directors - Yunis Shaik, Amon Ntuli, Kevin Govender and Mohamed Ahmed.
The biggest change, however, comes with news that Walter Simeoni will retire as Seardel’s CEO with effect from November 2009.
The highly experienced Simeoni served as CEO of Seardel’s subsidiary Frame Textile Group for nearly two decades before replacing Searll as CEO of Seardel in June last year.
It seems an awfully short tenure for Simeoni in the CEO’s chair, and one can only wonder whether there has been a difference of opinion between Simeoni and new controlling shareholder HCI as regards the best way of effecting an operational turnaround.
A statement from Seardel, however, noted that Simeoni’s vast experience would not be lost to Seardel as the executive had agreed to assist the group after his retirement “should the need arise”.
Stuart Queen –a highly regarded executive from within HCI’s ranks – has been named as Simeoni’s successor. Queen has already got to grips with Seardel, having served as the group’s Chief Financial Officer since last year.
Further executive re-shuffling sees Anthony Dixon-Seager, who HCI recently appointed as Seardel’s CEO of Clothing, being promoted to group Chief Operating Officer.
Dixon-Seager’s responsibilities will be expanded to include the operations of Seardel’s textile division in addition to his current clothing division responsibilities.
Naturally one might wonder whether HCI has affected too much change too soon – especially since struggling Seardel could do with a couple of experienced hands of the loom as the company tries to pick up the operating stitches.
The truth of the matter – at least in CBN’s humble opinion – is that Seardel probably needs new and energetic executives with fresh operational strategies to the effect a meaningful turnaround.
Gut feel is that the new look executive team will bring a much needed new perspective on cost efficiencies – something that may be helped by the fact that HCI has a close relationship with the Clothing and Textile Union (a stakeholder and shareholder in Seardel).
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