Sheraton Textiles: IDC seeks strategic equity partner
By Staff Writer
SHERATON Textiles, a designer and manufacturer of fine household linen and accessories since 1920, could be getting a strategic equity partner.
Sheraton, which is a 100% subsidiary of the Industrial Development Corporation (IDC), incurred a net loss of R16-million for the 2024 financial year. This followed its loss of R23m in 2023.
Sheraton Textiles financial performance drop
“Turnover was reduced by 10% from 2023 due to a depressed retail market; however,
with slightly improved margins and efficiencies resulting in cost savings. Working capital requirements remain high with logistical delays globally impacting stock days,” according to the IDC’s 2026 Annual Performance Plan.
According to the plan, Sheraton has been experiencing poor trading conditions and has been unable to generate profits since the pandemic.
The challenging economic environment was exacerbated by Sheraton’s reliance on retail clients who had been trading below expectations due to adverse economic conditions.
Equity partner considerations at Sheraton Textiles
Sheraton’s management implemented a turnaround plan, but this plan had not delivered the intended results as Sheraton continued to generate losses.
The IDC approved R21,4-million in funding for a turnaround plan to support Sheraton’s board and management. This plan will see the group based in Diep River, Cape Town, diversify its customer base to address its over-reliance on the retail market.
The turnaround plan will also look at improving its efficiencies and exploring cost savings.
IDC said the funding it provided also included filling of “critical vacancies” to ensure succession planning and the appointment of a dedicated business development executive and chief operating executive.
The IDC is also open to bringing in a new shareholder as part of its efforts to turn the group around.
“Whilst the IDC remains a committed shareholder, the possibility of introducing a strategic equity partner which could grow the business and provide equity capital is one option being considered by IDC to secure the sustainability of the business.”
Turnaround plan funding and facility upgrade
In May 2024, the IDC announced that it invested R140-million into a state-of-the-art production facility at Sheraton’s Diep River plant.
Speaking at the launch event, then Minister of Trade, Industry and Competition (DTIC), Ebrahim Patel said, this development is in line with the government’s localisation and industrialisation initiatives aimed at strengthening the competitiveness of the local clothing, textiles, footwear and leather industries.
“It’s imperative for local companies to invest in state-of-the-art plant and production facilities and machinery so that locally produced goods can compete against imports. This way, we are helping to preserve local jobs and, in the process, enhancing the country’s industrial capacity,” said Patel.
The IDC initially invested in Sheraton in 2009 as part of a business rescue process in support of the SA government’s strategy to support the textile industry.
Worker ownership trust initiative
IDC has approved the sale of a 15% share in the company to a newly established workers’ trust for a nominal amount.
The IDC has invested R1,6-billion to support employee stock ownership plans (ESOPs) and their related worker and community trusts, according to its Development Report 2018–2022. This has seen it establish 110 workers and 45 community trusts, which include 24 community trusts funded under the Renewable Energy Independent Power Producer Procurement Programme.
In the 2026 Annual Performance Plan, the IDC said Sheraton’s workers’ trust has been registered, and the transfer of shares was imminent.
