Mor­eish Moyo

Rapid ex­pan­sion planned for pan-African brand

Finweek English Edition - - Business Strategy - FRIK ELS frike@fin­week.co.za

“EV­ERY STORE’S a big project,” says Ja­son Lurie, founder and CEO of Moyo. From a small pan-African restau­rant that opened its doors in Nor­wood in 1998, Moyo has grown into a food, en­ter­tain­ment and life­style chain with 900 em­ploy­ees and more than 1m cus­tomers a year.

That’s the cur­rent state of play. Armed with R25m in ven­ture cap­i­tal from HBD (Here Be Dragons), Moyo (a loose trans­la­tion from the Swahili word for “soul”) plans to dou­ble its turnover over the next year. It will add an­other 2 500 seats in a new R10m-plus project in Foun­tains, Pre­to­ria, that’s al­most 3ha in size on top of the al­most 4 000 ca­pac­ity it al­ready has in Mel­rose Arch and Zoo Lake (Jo­han­nes­burg), Spier Es­tate (West­ern Cape) and the re­cently opened out­let at uShaka Pier (Dur­ban). An­other four-storey site at Blaauw­berg beach near Cape Town is al­ready un­der de­vel­op­ment.

“From the very start my idea was to build a brand. The restau­rants are the face of it. I don’t see Moyo com­pet­ing with other restau­rants. We com­pete with other forms of en­ter­tain­ment,” says Lurie, who is also an ac­com­plished mu­si­cian and an eco­nomics lec­turer in his pre­vi­ous life. “Peo­ple spend a lot of time in our restau­rants: we of­fer a multi-lay­ered ex­pe­ri­ence. We’ve re­lied on word of mouth for our growth; we’ve never ad­ver­tised and spend most of our time on peo­ple al­ready in our restau­rants.”

Ex­pan­sion doesn’t stop with new restau­rants: a ho­tel in Gaut­eng – just an­other menu item, now of­fer­ing “steaks, eggs, chips and rooms,” jokes Lurie – and a move into in­ter­na­tional mar­kets are next on the agenda. In­ter­na­tional vis­i­tors make up as much as 20% of pa­trons in the Cape and, given the many South Africans who bring along friends from over­seas, the pro­por­tion is prob­a­bly higher.

Says Lurie: “Open­ing up in mar­kets such as Ger­many and Bri­tain would make sense. Moyo is al­ready some­thing of an un­of­fi­cial African em­bassy – a por­tal into Africa. The United States is also a pos­si­bil­ity – the US is Africa-mad, es­pe­cially now with Barack Obama. It would be great if Africa weren’t al­ways seen with a beg­ging bowl in the West. I’d like to see a Moyo take a place down Fifth Av­enue in New York.”

“We’re very site de­pen­dent – it has to have iconic sta­tus. There are many op­por­tu­ni­ties: the trick is to know what to say no to. Ex­pand­ing over­seas is a steep learn­ing curve. You don’t want to end up on the wrong end of the pound,” says Lurie.

Apart from tra­di­tional pri­vate restau­rant pa­trons, re­tail and cor­po­rate events through Moyo on the Move and func­tions al­ready make up 40% of the busi­ness. Size is im­por­tant to Moyo: for ex­am­ple, be­ing able to cater to 2 500 guests at the Cape Epic cy­cle race. Stand-alone re­tail out­lets or mar­kets (cre­at­ing the vibe of a Moroc­can souk as an ex­am­ple) are also be­ing looked at. De­spite its ag­gres­sive ex­pan­sion plans, Lurie has seen some slow­down in Moyo’s busi­ness, par­tic­u­larly in Cape Town. “Jo­han­nes­burg on the other hand had a very good De­cem­ber, prob­a­bly be­cause more peo­ple stayed at home than went on hol­i­day. Hope­fully, the 2010 Soc­cer World Cup will smoothe out the curve. I sense much bet­ter co­he­sion and co-op­er­a­tion in the in­dus­try in the run-up. It’s al­ways good to talk to your peers.”

Of course there’s com­pe­ti­tion, but Lurie says the bar­rier to en­try in this busi­ness is the peo­ple. “We em­ploy peo­ple from all over Africa. We have two peo­ple just work­ing on mo­saics, for in­stance. It would be dif­fi­cult to recre­ate Moyo.”

Moyo and HBD, which apart from cap­i­tal, are also pro­vid­ing ex­per­tise and spending a lot of time fig­ur­ing out what makes sense for the com­pany. HBD, the ven­ture cap­i­tal firm founded by Mark Shut­tle­worth, has moved from a fo­cus on tech­nol­ogy to con­cen­trat­ing on com­pa­nies in an ex­pan­sion phase and pur­pose­fully keeps its in­vest­ment port­fo­lio small (less than 10 com­pa­nies), so that it can be­come strate­gi­cally in­volved.

“We’re not sleep­ing part­ners – but nei­ther do we get in­volved with the dayto-day man­age­ment of the com­pany. We don’t want to lose the out­sider per­spec­tive or bird’s eye view of the busi­ness,” says Ju­lia Long, CEO of HBD.

Over the past 10 years Moyo has picked up a num­ber of share­hold­ers. How­ever, apart from com­pany level in­vest­ment, var­i­ous en­ti­ties also get in­volved at spe­cific sites. “All head of­fice staff are in­volved at store level and our offices are on site. Our meet­ings are held in the restau­rants. It’s prob­a­bly just the chief fi­nan­cial of­fi­cer who needs to sit be­hind a desk,” says Lurie.

Asked about his av­er­age work­ing day – a pre-break­fast board meet­ing un­til restau­rant clos­ing time – the an­swer is straight­for­ward: “I work in the hos­pi­tal­ity in­dus­try. It’s my life. It’s not a job.”

Wine, food and now rooms. Ja­son Lurie and Ju­lia Long

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