In­ter­na­tional cloth­ing re­tail­ers still on the rise in SA

Finweek English Edition - - IN BRIEF - BY BUHLE NDWENI ed­i­to­rial@fin­

De­spite a tough eco­nomic cli­mate, in­ter­na­tional fash­ion brands are per­form­ing well in South Africa. Aus­tralian fash­ion re­tailer Cot­ton On Group, which en­tered SA’s fash­ion re­tail scene in 2011, has been go­ing from strength to strength and is look­ing at ex­ten­sive ex­pan­sion within the next 12 months. Mean­while, Swedish fash­ion re­tailer Hennes & Mau­ritz (H&M) will be launch­ing its first South African store in Cape Town next month.

In­creased de­mand for glob­ally recog­nised fash­ion brands has led to an inf lux of trendy in­ter­na­tional fash­ion re­tail­ers onto South African shores over the past cou­ple of years. And de­spite the com­mon belief that tough eco­nomic times would slow the growth of t hese i nter na­tiona l brands as con­sumers ex­pe­ri­ence in­creased fi­nan­cial pres­sure, these fash­ion re­tail­ers are still on the rise in SA.

The power of so­cial media and online re­tail­ing (e-com­merce) has made the re­tail space more com­pet­i­tive, as con­sumers can see the latest in­ter­na­tional fash­ion trends in real time. The avail­abil­ity of these in­ter­na­tional brands in SA of­fers fash­ion­for­ward con­sumers a bet­ter shop­ping ex­pe­ri­ence. Con­sumers can keep up with global trends, some­thing SA-based fash­ion re­tail­ers fail to do as they or­der ahead of sea­son.

Span­ish fash­ion re­tailer Zara, which en­tered SA in 2012, will be open­ing store num­ber seven at the end of the year. Mer­chan­dise is de­liv­ered in stores twice per week in re­sponse to items de­manded by cus­tomers.

Swe­den- based f ash­ion r eta i l er H& M will also be join­ing in­ter­na­tional fash­ion re­tail­ers in the SA mar­ket when it launches its f irst store at the V& A Wa­ter­front’s The Vic­to­ria Wharf Cen­tre in Cape Town next month.

Mean­while, be­gin­ning Septem­ber, Aus­tralian fash­ion re­tailer Cot­ton On Group – which en­tered SA’s fash­ion re­tail scene in 2011 and cur­rently has 130 stores in SA – an­nounced plans to dou­ble the size of its lo­cal busi­ness by open­ing 100 new stores within the next 12 months; 40 new stores by Christ­mas and another 60 in the first half of 2016.

While the group has no im­me­di­ate plans to f ur­ther ex­pand into other coun­tries on the con­ti­nent, it opened its first two stores in Namibia in May this year, un­der its Johannesburg-based re­gional hub Cot­ton On South Africa.

The fash­ion trends can, of course, go ei­ther way. With Aus­tralia and SA shar­ing the same cli­mate, Cape Town­based re­tailer Wool­worths also made a num­ber of ac­qui­si­tions in Aus­tralia, with David Jones be­ing the latest last year. And ear­lier this year, lo­cal fash­ion-for-value re­tailer Mr Price, which has per­formed well across the African con­ti­nent, also an­nounced plans to open stores in the Aus­tralian cities of Mel­bourne and Syd­ney.

Cot­ton On Group CFO Michael Hard­wick says as a fash­ion re­tailer with a pres­ence in 17 coun­tries, both in the south­ern and north­ern hemi­sphere, there are fash­ion trends that res­onate with its brands across the globe. “These are re­ally driven by ac­cess to so­cial media and the in­ter­net as well. There’s lots of con­sis­tency now in sellers in SA and Aus­tralia, Brazil and parts of Asia,” says Hard­wick, adding that they will in­tro­duce prod­ucts into a mar­ket where they see lo­calised op­por­tu­ni­ties. Six of Cot­ton On’s seven brands are cur­rently in SA. These are Cot­ton On, Cot­ton Kids, Cot­ton On Body, Typo, Rubi Shoes and Factorie in SA. The sev­enth brand Supré, a brand for fash­ion-for­ward women and girls aged 14 to 18, will be in­tro­duced in SA in 2016.

“For us there is a lifestyle sim­i­lar­ity be­tween Aus­tralia and the South­ern hemi­sphere,” says Hard­wick. “It ’s out­doors, it ’s f un, it ’s young and en­er­getic. And that’s what’s dif­fer­ent from some of the north­ern hemi­sphere brands that are com­ing to the south­ern hemi­sphere as op­posed to a com­pany such as us that has a legacy within the south­ern hemi­sphere.”

Glob­ally, the group has ex­pec­ta­tions to con­tinue grow­ing in ex­cess of 20% year-on-year; in SA it ex­pects to grow in ex­cess of 50%. “South Africa is be­com­ing a more im­por­tant part of our global busi­ness, even though to­day it rep­re­sents 12% in­ter­na­tion­ally. It’s been a very im­por­tant part of our growth strat­egy,” says Hard­wick. In terms of the Cot­ton On Group’s brands, glob­ally Cot­ton On rep­re­sents 50% of the mar­ket and the re­main­ing five brands rep­re­sent 10% each. The same is true in SA.

Michael Hard­wick

Group CFO of Cot­ton On

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