Local sneaker brand Drip Footwear has been placed in liquidation, resulting in the dismissal of its workforce and the closure of 14 stores nationwide.
The winding up of the company comes after a court ruling stemming from a legal battle with advertising agency Wideopen Platform over an unpaid debt of R20m.
In a letter to employees dated October 7, Drip Footwear said it had exhausted all avenues to avoid liquidation and all employment contracts would be terminated immediately.
Arrangements would be made to collect company assets as part of the liquidation process, it added.
“The practical implication of the liquidation can be summarised as follows:
3.1 Your employment contracts are terminated with immediate effect.
3.2 We request that you no longer tender your services.
3.3 Any outlets will be closed with immediate effect.
3.4 The appointed liquidator will take over all Drip Footwear operations/assets,” the letter states.
Founded in 2019 by Lekau Sehoana, Drip Footwear sought to promote local craftsmanship and cultural identity. The brand quickly gained popularity thanks to its innovative designs and a robust social media presence. It grew to 25 retail outlets and even launched collaborations, such as the popular Root of Fame range with rapper Cassper Nyovest.
Despite its initial success, Drip has faced financial challenges in recent months. The court’s decision to liquidate the company has raised concerns about the livelihoods of its employees and the wider impact on their families.
The situation has also attracted political attention. Gauteng economic development MEC Lebogang Maile has urged the Reserve Bank to reconsider withholding R3.6m from Drip due to violations of foreign exchange regulations.
Maile has faced criticism for his involvement, with detractors questioning the appropriateness of his support. But Maile said it was important to support local businesses, particularly those founded by historically disadvantaged individuals.
He called for a “rehabilitative intervention” from the Reserve Bank, emphasising that small businesses like Drip should not be penalised without the opportunity to learn and comply with regulatory frameworks.
“The law should never be punitive but rather rehabilitative,” Maile said. The liquidation of Drip Footwear would not only affect hundreds of employees but also hinder the growth of township businesses that play a vital role in the economy,” he said.
Over the past five years, the Reserve Bank has issued numerous forfeiture orders for violations of exchange control regulations, but Maile argued that a more supportive approach is necessary for the sustainability of small and medium-sized enterprises.
With Kabelo Khumalo
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