International clothing retailers still on the rise in SA
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.
Group CFO of Cotton On