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Archer Clothing is set to resume operations next week

Oliver Kazunga Senior Business Reporter—
BULAWAYO’s giant textile firm, Archer Clothing, is set to resume operations next week with 200 jobs up for grabs after its creditors struck a deal that saved the company from provisional liquidation. The clothing firm has been facing operational constraints that saw it being placed under judicial management in 2010 due to a shortage of working capital before downsizing and offloading scores of                     workers.

Harare-based textile firm, Paramount Garments, has come to the rescue of the company and is finalising the takeover deal of Archer Clothing for an undisclosed amount.
The firm is not producing at present.

Creditors approved its takeover by Paramount Garments at the High Court in March this year, saving it from liquidation and raising hopes for the 61-year-old company’s revival.

“We’re starting operations on Monday next week and we will be recruiting more than  200 workers by the end of the month,” Paramount Garments managing director, Jeremy Youmans, told Business Chronicle yesterday.

“The recruitment will be staggered as we seek to improve on capacity utilisation from an average of zero percent to 25 percent by the end of the month.”

He added: “The delay to take over the company is a result of some bureaucracy where one creditor is holding up the takeover process when in fact 40 creditors voted for the deal to sail through. As we open this will affect our efforts to increase capacity utilisation to competitive levels.”

Archer Clothing requires about $5 million capital injection in the long-term to refurbish its properties, machinery, cater for human resources and working capital in stocks and debts.

Negotiations for the takeover of the ailing city firm began last year when the two companies initially entered into a Cut Make Trim arrangement.

Under the deal, Paramount Garments assisted with clothing material and labour while Archer provided working space pending the liquidation process.

After being placed under judicial management, Archer Clothing scaled down operations, laying off 270 contract workers and 210 permanent employees.

Its revival is a welcome development for the local clothing industry and is set to boost the business morale of Bulawayo.
At its peak, the textile sector used to produce about 135 million garments annually, compared to the current 18,7 million garments.
The sector employed 35,000 workers countrywide compared to present levels of just under 7,000.
The industry had an unlikely jobs bounce in 2013, adding over 800 jobs amid a marked slowdown in economic growth.