FASHIONISTAS rejoiced and local clothing retailers
stepped up their plans to maximise supply chain efficiencies as global fashion
brands suih as Zara and Topshop expanded in South Africa last year.
The upsurge of consumer culture in Africa presents a compelling
investment case for international companies, which are progressively looking at
rising emerging-market wealth to offset sluggish growth in traditional
economies.
Abri du Plessis, CEO and chief analyst at Gryphon Asset
Management, says the view internationally is that Africa is one of the large
growing markets available and, given the local market’s well-developed nature,
international players that are interested see it as a "stepping stone and
one of the first entry points into the rest of Africa".
Gap, bebe, Cotton On Group, Thomas Pink and Superdry have
also set up shop in the country.
According to Isabel Cavill, senior analyst at London’s
Planet Retail, retailers are considering setting up in South Africa because
they’re looking for new income streams in a relatively untapped market and are
setting up shops in areas that are affluent enough to support their stores.
Fast-fashion retailers, which are famed for getting
products based on the latest catwalk trends into stores in as little as two
weeks, are now starting to get around reverse seasonality by creating ranges
that are less season-sensitive, allowing them to ship further afield.
New items appear in Zara’s stores twice a week and the
brand has created a range specifically for the southern hemisphere. Topshop’s
store in Sandton City receives new stock every week.
While their footprint is dwarfed by the presence of local
market operators, being that nimble has spurred local groups to pay closer
attention to their fashion credibility by shortening their merchandise cycles.
Doug Murray, CEO of the Foschini Group, says the supply chain has been the
company’s focus area for several years.
"We used to have 180 days’ lead time, now we’re
working on 130 days, 90 days and 56 days. In shorter lead times you are more
likely to call the fashion right if you are making the decision closer to the
point that the product is going into the store."
Mr Price CEO Stuart Bird says the proliferation of
international brands in South Africa gives the local consumer more choice.
"For us, it’s not a bad thing and it certainly keeps us on our toes."
Woolworths CEO Ian Moir says competition is a good thing.
"If you don’t get competition you get lazy and you lose sight of what you
need to do. We’ve had a very competitive environment, The Foschini Group do a
good job, Truworths do a good job, it’s not as if we haven’t had competition
earlier."
Hype aside, a dose of reality is needed as the barriers
to trade successfully in South Africa are quite high. Aggressive expansion of
these global brands will be capped by the shortage of prime location spots in
key malls, and much also depends on their price points.
The brands are often mass marketed in terms of fashion
and quality, yet when the firms bring merchandise to South Africa, it tends to
be quite expensive. They also do not have the credit offering that a number of
retailers in South Africa are able to extend.
Truworths CEO Michael Mark says in the group’s annual
report the firm regarded global competition in the same manner it did local
competitors.
"International retailers who open stores in South
Africa do not necessarily understand trends better than we do and they face
their own difficulties in trading in South Africa. While the group will never
become complacent to the threat of local or international competition, we
believe that if the right fashion is available in our stores it will continue
to attract customers, regardless of the level of competitor activity."
So while slick global retailers may have a stellar track
record in reading and setting fashion trends, it is safe to say that a fashion
face-off is a while away and it will take time for them to cause a big bang and
really break into the local market where South Africa’s existing players are
already doing a pretty good job.
In the meantime, consumers can look forward to more
brands entering the country. "The South African market is crying out for
more fashion-forward, or what we call ‘directional’ retailers, as up until
recently the clothing market in South Africa has been quite conservative,"
Ms Cavill says.
Culled: bdlive.co.za
GLOBAL CLOTHING RETAILERS EYE AFRICA’S FASHIONISTAS
Reviewed by Bash
on
09:42:00
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