WHY YENKETSAMY CUT AND RAN…
VICTOR YENKETSAMY’S 50-employee clothing business – Talia Fashions – went the way of most owner-managed businesses that close down. There was no great accident, fire or robbery; nor a compelling case of bankruptcy. With a turnaround strategy it probably could have pulled through.
The reason why Yenketsamy closed his Durban-based company after 13 years in business was that he was fed up.
Due to the flood of cheap imports and subsequent uneven workflow, Talia Fashions fell behind in bargaining council levies and fund contributions to the tune of R120 000. He claims that at the last arbitration meeting at the NCBIC he was fined R13 000 for outstanding contributions of R27 000.
Yenketsamy says he registered with the bargaining council four years ago after a client insisted that he joined. He received exemption from the minimum wage of R560/week and was allowed to pay his workers R430/week. But there’s no mercy shown for falling behind with levies and fund contributions.
The last straw for Yenketsamy was during a dispute with 18 of his workers, whom he accused of dragging out their work.
With the help of their union official, Prince Pakkies, they also dragged out the dispute, he says.
Pakkies denies Yenketsamy’s version. He claims Talia Fashions went out of business due to bad management.
However, cut-make-and-trim (CMT) outfits such as Talia are certainly experiencing hard times. These businesses have no design function; they’re pure production facilities, putting garments together for large clothing companies that give them the raw materials, the patterns and very tight deadlines. They also dictate the price that they’re willing to pay. CMTs have virtually no bargaining power.
Yenketsamy says that, typically, he’d produce a shirt for R10, the large clothing company would sell it to a retailer for R50 and the retailer to the public for R100. “And then they expect me to pay the same wages as the large company.”