DOLLAR SIGNS
Luxury spend on the rise in Africa
IN THE Louis Vuitton store in Sandton City, customers survey handbags and sunglasses displayed like works of art. One couple wants to buy a bag, but there’s a global waiting list for the Tabor (it costs R61 000). You can also pick up a scarf for R3 000 or an entrylevel purse for about R4 600.
Word is that Louis Vuitton is in talks with Sandton City to expand its shop because it’s doing so well, particularly at weekends. Many customers are from Africa, especially from Angola and Nigeria, says an assistant. This shows how Africa is rising to the top of many brands’ growth agenda.
A study from Bain & Company forecasts 11% growth in luxury sales on the continent. The spend on luxury goods in Africa is about à2- billion, up from à1.5- billion in 2011.
Bain SA partner Oliver Merkel says South Africa is still the largest, accounting for more than a third of the continent’s luxury revenue. Luxury brands such as Louis Vuitton, Cartier, Gucci and Fendi are already on the continent, and Ermenegildo Zegna, the first Italian brand to enter China, is also the first to open in Nigeria.
The new Porsche dealership in Lagos aimed to sell 300 cars a year, but had sold more than 200 in just six months. “The rich Nigerians want it as a status symbol. They don’t really drive the cars because the streets are so bad,” said Merkel.
But luxury goods have proven to be a harder sell in developed markets.
There had been speculation that Johann Rupert’s luxury brands group Richemont — which owns Cartier jewellery, Montblanc pens and IWC watches — could sell some of its underperforming brands.
On Friday, Richemont said it won’t do so yet, as it reported that its net profit had risen 10% to à1.185- billion in the six months to September.