Wealthy whisperers boost luxury brands
NOT many consumers are likely to know about the Surtee Group holding company, but most shoppers in urban malls are probably well aware of the top-end brands in its portfolio, such as Hugo Boss, Canali and Hackett.
MD Muhammed Surtee has been involved in the business— started by his father and three uncles in 1986 — for decades.
The group is one of the largest privately owned fashion retailers in South Africa, and for more than 25 years has focused on high-end men’s fashion.
Now it is expanding into top brands of women’s clothing, through Mamas & Papas. Next month, the Surtee Group will include homeware offerings from brands such as Ralph Lauren, Hugo Boss and Kenzo through its Grays store.
Surtee said jeans had become an integral part of office wear, with everyone from office workers to executives dressing up denims with jackets.
The category that has increased sales the most in the past decade has been jeans and denim — making up for the loss of tie sales.
“Jeans have become the new black,” said Surtee.
So the group has added jeans brands True Religion and 7 For All Mankind, opening two standalone stores in Sandton City, Johannesburg.
Hugo Boss is the top-selling brand in the group’s portfolio. Said Surtee: “It’s associated with phenomenal quality, a good price point, but it’s also good visually.
“Everywhere you go in the world it’s visually available, and the marketing they do with watches, fragrances, underwear — there’s a great affinity in South Africa.”
And, he said, social media was more important than ever — with the fashion blogger becoming the new kingpin.
“We spend a lot of money quantifying data from social media and can see the number of followers increasing.”
The internet is a powerful tool, and business is dependent on word of mouth and social media, even more so in some cases than magazines and some newspapers.
“People’s opinions matter. The market has changed and word of mouth is key for us,” Surtee said.
Another development is the private shopping experience.
Where businessmen used to have time for long lunches, “time is money” these days.
“If a guy needs a specific wardrobe they can call us, we go and dress with a tailor. We let him try, and later match it up and have it delivered back to him,” Surtee said.
Style consultants are also playing a bigger role. “A lot of people may have disposable income but are confused as to what looks good. Style consultants come in and help them.”
Retailers have come under pressure over the past year, with consumers tightening their belts, but Surtee said luxury retail had not been hit as hard.
“The customer category we generally deal with — they don’t lose a lot in downturns or the recession, they’re pretty stable in business or through inherited wealth. You might see a slight dip with a recession, but in the same breath there’s always someone making money.
“More than selling luxury, you’re selling someone the ability to reward himself.”
He sees two types of consumers: those who like to show the brand and those who prefer a more understated approach; people who believe money screams but wealth whispers.
The business has 27 stores and several joint venture shops: two with Hackett, five with Montblanc and 27 with Timberland.
Three of the initial four brothers who started the business remain with the group, now with their four sons. The fourth brother left to set up the Surtee Group: The Power of Trading, which has 33 boutiques, including Burberry, Lacoste and Armani Jeans.
But the family have been involved in men’s fashion since Surtee’s grandfather’s time. In fact, his son, Yusuf, Surtee’s father, was known as Nelson Mandela’s tailor, with Madiba relying on him for fashion guidance for many years.
The Surtee Group is relatively debt-free, having taken a cautious approach to expansion over the years and reinvesting most of its earnings.
Surtee said the plan in a few years was to possibly list, branch out internationally or get a private equity partner. “Once we’re of a substantial size, potential opens up to us.”
The group is looking at partnerships in Angola, Mozambique and possibly in Zimbabwe, Zambia, Tanzania, Ghana and Nigeria.