End of an era for Drip Footwear: footwear retailer enters liquidation, laying off employees

Source: www.facebook.com

Earlier this year, Wideopen Platform filed papers in the high court in Johannesburg, seeking an order to wind up Drip. It said the company was insolvent and unable to service its debts.

The company also intended to file a lawsuit against Drip owner Lekau Sehoana for failing to pay the debt after signing a surety agreement.

The liquidation order has resulted in its employees being laid off this week.

It's been reported that Sehoana informed his workers of the termination of their employment on Monday, 7 October 2024, after months of unstable payment of their salaries.

Fourteen stores across the country are expected to be closed down in the coming months.

Drip Footwear, reported to have a net worth of R280m, sold its own line of sneakers across various retail centres across the country.

It was also reported that attempts have been made to save the company, with senior political figures and regulators also involved.

In August this year, Gauteng finance and economic development MEC Lebogang Maile requested a “rehabilitative intervention” from the governor of the Reserve Bank, Lesetja Kganyago, for The Drip Group.

Business Day reported that the South African Reserve Bank (SARB) seized approximately R3.5m of Drip’s funds after failing to adhere to South Africa’s exchange control regulations.

Maile believes the Gauteng government has an obligation to help businesses in the province in material and non-material ways.

“We cannot sit back and watch The Drip Group, a company founded in the township of Ivory Park by a young Black man who had the odds stacked against him, be liquidated. The company provides employment to hundreds of people, many from historically disadvantaged groups including women and youth,” he said.

“As a government, we must do everything possible to provide the necessary support to this and other small businesses that are facing challenges, particularly when such challenges arise from failures of compliance with legislation, which is not the same as blatant and intentional criminality.”

Castro Ngobese, spokesperson for Maile, said the investigation, instituted by the Bank's financial surveillance department, had been running for just over two years.

Drip Footwear joins a growing list of over 1,000 South African companies that have been liquidated since the start of 2024.