MPs across the political divide today expressed support for the decision of the National Empowerment Fund (NED) to fund a luxury Johannesburg boutique – despite earlier misgivings.
NEF CEO Philisiwe Mthethwa gave Parliament’s trade and industry portfolio committee a full breakdown of the merits of its decision to fund Ndalo Luxury Ventures (NLV) to establish the Luminance boutique in Hyde Park, Johannesburg.
The briefing followed an outcry from opposition parties and the SA Clothing and Textile Workers’ Union (Sactwu) last month.
Sactwu said it was a national disgrace to pump R34.1 million into a boutique that “undermines local procurement of clothing, textiles, and leather goods and hence promotes local job losses”.
The Democratic Alliance was equally scathing in its rejection of the deal, saying funding NLV – owned by wealthy individuals – was “anything but broad-based and essentially amounts to empowering the empowered”.
The boutique is run by Khanyi Dhlomo, her mother Venetia, and businesswoman Judy Dlamini.
Mthethwa explained today that the NEF had several times turned down NLV’s application for funding, because it did not comply with their codes of good practice.
The company was given several preconditions before the deal was approved, and the transaction was then aligned with the NEF’s mandate.
“We are saying it’s 100% owned by black women, including staff and rural women. Staff and rural women have 20% of the transaction,” Mthethwa said.
In addition, 71% of the Luminance brand was manufactured locally at a women-owned factory in Wynberg, Johannesburg.
The factory employed over 100 local women from the Alexandra township.
“The balance of the collection is manufactured in Italy to enhance the quality of the local brand,” Mthethwa said.
The funding was necessary, as retail remained one of the most “untransformed sectors in South Africa” and was dominated by white, foreign, and male-owned retail groups.
Trade and Industry Minister Rob Davies weighed in, and, on a lighter note, said: “I’m glad that the presentation has clarified one thing: that the Luminance store is a women’s clothing store, because some wag in the press suggested I should go there to get some fashion advice. I need to underscore I’m not a transvestite.”
On a more serious note, Davies was satisfied the deal was in line with the NEF’s mandate.
The department of trade and industry (the dti) had issued a directive to the NEF and other dti agencies stressing that “government funds may not be used to support the importation of finished goods and services”.
Where local suppliers could not be found, permission had to be sought from the department to deviate from the directive.
ANC MP Bhekizizwe Radebe welcomed the inputs from both the NEF and Davies, and suggested the Luminance deal was in line with BEE objectives.
“Why … is there such a noise? The thrust of this thing must be supported,” Radebe said.
DA MP Wilmot James, who initially opposed the deal, welcomed the merits of the transaction.
“I hope that Luminance one day will be a subject of illustration and study at graduate schools of business of successful companies,” James said.
“Luminance as a company is run by some fabulous people, and from where I sit I wish it success.”
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