By Tom Robbins

Cape Town – Fifa’s master licensee, Global Brands, has signed an agreement with local manufacturer Seardel to produce World Cup branded clothing for the 2010 soccer tournament.

The deal could give Seardel a much-needed fillip after the country’s largest clothing maker yesterday posted results that revealed a 41 percent decline in profit to R50.8 million for the year to June. Headline earnings a share fell 69 percent to 22.7c.

Seardel, which will produce World Cup items such as T-shirts, jackets and underwear for the domestic market, expected to make the clothes available from late this year until to the end of the event.

Financial director Arthur Jacobson said yesterday that it was too early to give an indication of projected revenue resulting from the deal. The company would only start meeting retailers from today to ask about requirements.

Jacobson said he expected Seardel to have a better idea of the prospects after a business plan was completed in about two weeks.

The intention was to manufacture \”as much as possible\”, he said, but the company would not be able to meet all market requirements.

Nicholas Bloom, the licensing director for Global Brands South Africa, said global retail revenue of official products for the 2006 soccer World Cup in Germany had been about $2.3 billion (R16.1 billion), of which clothing made up a large part.

This excluded product sales by sponsors, such as Coke.

He said the strategy had moved away from event-based revenue to building annuity income between world cups.

As far as possible, Jacobson said, Seardel would use fabric from its Frame Textiles business, but it did not have the capacity to produce the majority of textiles required.

The company would add to its 15 000 workforce, but could not specify how many jobs would be created.

Seardel said its revenue rose 5.9 percent to R3.79 billion in the year to June, but this followed three successive years of revenue decline, which it has ascribed to a flood of cheap Chinese imports.

Jacobson said quotas limiting imports of clothing made in China, implemented at the beginning of the year, had brought \”some benefit\”, but many retailers had simply moved sourcing to other countries in the Far East with cheap production bases.

Seardel chief executive Aaron Searll said: \”We are delighted to be a part of what is expected to be South Africa’s biggest licensed property for the next few years.\”

In 2005 Fifa appointed Singapore-based Global Brands as its worldwide exclusive licensing representative as well as its store operator for retail outlets from 2007 to 2014. It will sell the branded clothing from stadiums at the 2010 event.

Seardel’s shares were untraded at R6.65 yesterday.

Published on the web by Business Report on September 26, 2007.