The High Court in Johannesburg, South Africa has recently ordered Drip Footwear to be liquidated after it failed to pay R20 million for its advertising services. Liquidation is the process of bringing a business to an end and distributing its assets to claimants usually after it has become insolvent and failed to pay its obligations when they are due.
Lekau Sehoana introduced a line of branded sneakers called Drip in July 2019. With no strong marketing techniques, it took Lekau six weeks to sell the first 600 pairs of shoes from his car boot. Conversations with consumers revealed a market for a fresh line of South African sneakers. He produced 1,200 sneakers in December of that year and sold them all in a matter of days. Drip Footwear also embarked on an expansive advertising drive with some partnerships with celebrities such as Casper Nyovest
It hasn’t been a good time for Drip Footwear, having to be dragged to the Johannesburg High Court in September by the V & A Waterfront after terminating its lease and demanding their owed R1.1 Million. Last year in June, it also closed its clothing shop Kiddes Republic. Early this year, in January, Wide Open Platform filed for insolvency and sought to wound up Drip Footwear saying it was insolvent and was unable to service its debts of R20 million for advertising space.
During its 5-year anniversary in July, Drip Footwear founder, Lekau Sehoana announced the launch of a new business, Sneaker Outlet as an addition to their Amanzi Group of Brands that will not be only selling Drip sneakers but other sneaker brands too.
In a notice addressed to its employees, Drip Footwear announced the bad news. The letter stated that: “Kindly note that the business has taken every measure to attempt and avoid the liquidation process. Unfortunately, this was an eventuality that could not be avoided, notwithstanding the measures considered by the business.” The memo is attached below:
Running and keeping a business has never been easy and it takes a lot of planning, leadership, sales, markets, management, investment, debt management, etc and this has seen some companies close up or getting liquidated. Drip Footwear joins a growing list of over 1,000 South African companies that have been liquidated since the start of 2024.