Luxury brands flock to Kenya as middle class tastes grow

Posted Thursday, August 1 2013 at 20:45

Kenyans increasing taste for trendy fashion is attracting global luxury brands to Nairobi seeking to cash in on an expanding middle class with higher disposable incomes. International brands positioning themselves to exploit the growing appetite for the finer things in life from clothes to shoes and drinks are also driving the development of shopping malls to house the stores. Increased income and global exposure are making Kenyans go for such brands. Many Kenyans are well travelled and know which brands are status symbols, said X. N. Iraki, the MBA co-ordinator at the School of Business, University of Nairobi . Spanish clothing retailer Zara entered the market last week through a distribution agreement with local retailer Deacons, which also launched the Massimo Dutti clothing line last week. Deacons, the leading retail chain in the region, will in October launch Bossini, a worldwide garment distributor and retailer label, based in Hong Kong, into the market with new stores in Yaya Centre and Village Market. South Africa-based retail chains Foschini and Edgars are planning to set up shop at the upcoming Garden City Mall on Thika Road by the end of 2014. (Read: SAs fashion chains Foschini and Edgars to open in Nairobi) British shoe retailer, Clarks, has expressed interest in opening three stores in Nairobi this year as the firm seeks a slice of Kenyan buyers with deep pockets. A sizeable number of expatriates UNEP, UN workers and foreign investors could also be driving the brands entry to Kenya, said Dr Iraki Deacons managing director Wahome Muchiri said increased exposure to international brands through travel, the internet and social media was also driving demand in the local market. There is a lot of interest. Customers are looking for more fashionable options and recognise these brands, said Mr Muchiri. Foschini Group has more than 200 stores in Southern Africa. Its foray into Kenya is part of a long-term growth strategy to increase earnings, having grossed Sh128 billion (R12.8 billion) in sales in the year to March 2013 Our strategy is already in place and we will soon be opening three stand-alone stores in Nairobi early next month. We are working with our Franchise partners Nakumatt, said

wholesale manager in charge of Middle East and Africa at Clarks International, Loveth Monteiro. The number of Kenyans classified as middle class has doubled in the last decade to almost a fifth of the population or 6.5 million Kenyans, data from the African Development Bank (AfDB) shows. It means that one out of every five Kenyans is considered middle class a status mostly defined by tertiary educated persons holding salaried jobs or owning small businesses, urban residency and ownership of household goods such as refrigerators, phones, flat screen TVs and automobiles. This has created a legion of savvy consumers given their exposure to global trends due to foreign travel experiences, subscription to premium pay-TV and access to the Internet. Social media plays a big role in influencing peoples choices especially in fashion. Through the Internet, Kenyans are exposed to high street fashion and designer trends, said Ria Ana Sejpal, a luxury fashion brand consultant at Kemaya Africa. Kemaya Africa is a luxury apparel store that offers high-end womens clothing specialising in versatile evening wear made by global fashion designers. Ms Sejpal said the firms collections, which retail at an average of Sh40,000, mainly target women in search of international aesthetics blended with a Kenyan taste. Kemaya Africa has exclusively signed up six Bollywood fashion icons Nikhil Thampi, Rohit Gandhi, Rahul Khanna, Ritu Kumar, Deepika Padukone and Sabyasachi Mukherjee to produce unique designs for its clients in Kenya and across the African continent. In addition to apparels, Kenyans are demanding finer drinks, especially single malt whiskies and champagne, with international brands looking to grow their market share locally. The middle class in the country is growing and Kenyans are travelling to London, Paris, and Dubai, and they come back to Kenya with the experience. I am seeing more people drinking champagne, single malt scotch and cognac. I am not saying that they have stopped drinking beer, but on special occasions, they are having fine products, said Mot Hennessys marketing manager for East Africa, Nicolas Ruellan. Mot Hennessy is part of the worlds largest luxury group, Mot Hennessy-Louis Vuitton (LVMH), which has over 60 brands. The company started active engagement with the Kenya market last year. (Read: Mot uncorks new bubbly in Kenya) Analysts project the recent oil and gas find in Kenya is likely to fuel economic growth and propel more people to join the middle income bracket. More interestingly is the prospects of a great economic future time driven by the oil and other natural resources, said Dr Iraki.

The African Development Bank defines persons with an annual income exceeding Sh340,000 per year and spending between Sh500 and Sh900 ($6 and $10) daily as being in the middle class but experiential analysis suggests this is too low. Dr Iraki also attributed the increased uptake of luxury brands by Kenyans to the budding culture of malls, which he says provides the space and hype to make buyers feel such shopping malls are the places to be. Deloitte & Touch notes that Africas middle class have more recreational time, creating demand for lifestyle products that range from fashion, jewellery, accessories and cosmetics. In a report titled The Rise and Rise of the African Middle Class, Deloitte says Africa is not impervious to new global trends and influences that are fast shaping consumer behaviours and consumption patterns.
Their spending patterns are being dictated and shaped through media and other influences as Africa opens up, reads the report.

SAs fashion chains Foschini and Edgars to open in Nairobi

Posted Tuesday, January 22 2013 at 19:08

South Africa luxury fashion houses will next year open shop in Kenya, offering consumers more choices and raising competition in the segment now dominated by Deacons. Actis, a private equity fund, has said that Edgars and Foschini are some of the retailers that have booked space in its Sh12.6 billion real estate development on the Nairobis Thika Superhighway that is billed as Kenyas biggest mall at 50,000 square metres. The continued growth of the middle class provides opportunities for consumer goods and services providers and fashion giants like Edgars and Foschini have booked space with others, said Michael Turner, regional managing director of Actis. This makes East Africa one of the most attractive destinations for investors in real estate and consumer goods to build retail space and establish their presence, Mr Turner said in an interview with the Business Daily. South Africa retail giant Massmart has also confirmed booking at Garden City in what intensifies competition in a market dominated by locals Tuskys, Nakumatt, Uchumi and Naivas. ALSO READ: Supermarkets take competition to Thika superhighway Foschini has 200 stores spread across Southern Africa dealing in jewellery, footware, handbags and clothing. Its revenues in 2011 stood at Sh145 billion.

Edgars has more than 100 outlets across South Africa, Botswana, Namibia, Swaziland, Lesotho and Namibia. It offers luxury clothing, footwear, textiles and accessories. Its sales hit about Sh110 billion in 2011. Both firms are looking to spread reach outside Southern Africa with Kenya acting as their launch pad for eastern Africa. Kenya has witnessed multi-billion shilling shopping malls spring up as real estate investors and retailers seek to tap into a growing middle class with growing disposable incomes and a limited choice of leisure activities. The malls have food courts, cinemas and luxury clothing. The new entrants will offer South Africa a piece of Kenyas retail market, a presence that diminished after the exit of retail chain Metro Cash and Carry in 2005. Franchise agreements Companies from South Africa have found it difficult to crack the Kenyan market, prompting the exit of big brands like cinema company Nu Metro, fast foods giant Nandos, household goods outlet Supreme Furnitures and magazines publisher Media24, a subsidiary of the Johannesburg Stock Exchange (JSE)-listed Naspers. However, South Africas Truworths, Woolworths and Mr Price have been successful, thanks to a franchise agreement with local retailer Deacons, which will now face new competition for control of Kenyas market. But Woolworths has spanned off from Deacons to form a joint venture dubbed Woolworths Kenya Proprietary Limited, which will be owned 51 per cent by the South Africans and 49 per cent by Deacons Kenya. READ: Woolworths to own 51pc of joint venture with Deacons Woolworths is dropping joint ventures to launch direct operations outside South Africa.

Max Fashion Eyes Growth In Sub-Saharan Africa

Posted on January 11, 2013 VENTURES AFRICA- With about 225 stores in 15 countries, Max Fashion, a premium clothing chain in the United Arab Emirate (UAE) is set to undergo a major expansion spree this year in Africa among other regions. It is particularly shifting its attention to sub-Saharan Africa among other regions in the world. Of the 40 stores targeted to be opened this year, the company plans to open between five and ten stores in the sub-Saharan Africa region.

When brands like us go into Africa we are trying to change the market because today retail is not as much organised there so it gives us an opportunity to be the first mover and start developing those markets and secondly in terms of the overall GDP growth and the upwards mobility of the people, said Maxs chief executive, Ramanathan Hariharan. He expects Maxs momentum in Africa to start building in the next two to three years. The rate of growth that these African countries will give us could be far, far higher in the next three to five years. The brand is relatively popular in the North African region. It already has about five stores in Egypt and it had opened business in Libya through a franchise partnership after the Libyan uprising. We opened in Libya immediately after the crisis, said Hariharan. Immediately after the revolution, the franchise remobilised and opened the store in a very short time. Libya, is a growing economy and considerable investments are taking place for rebuilding the economy. We are expanding into all countries in North Africa and thus, Libya is an absolute choice. Aside the Northern Africa region, the brand has two outlets in Nigeria. Max Fashions opened its first branch in Abu Dhabi in 2004. In 2012, it opened about 40 stores and achieved growth of about 20 per cent. It plans to open at least forty stores across the MENA region and India this year. Max fashion is the largest value fashion retailer in the Middle East. It deals in Clothing, footwear, accessories and household products.

Building An African Clothing Empire: Adenike Ogunlesis Ruff n Tumble

Posted on September 26, 2012 VENTURES AFRICA For more than a decade now, Adenike Ogunlesis has earned accolades, both at home and abroad, with her exciting and hip apparels in the children clothing business. From the time she kicked herself out school during her second year as a law student at Nigerias foremost institution, Ahmadu Bello University in Zaria, to discover what she really wanted out of life; Adenikes journey into the business world has been reckoned with as a business model to entrepreneurs not only in Africa but the world as a whole. After opting out of school, Adenike reluctantly accepted her mothers invitation to work in her womens Afrocentric clothing business called Betty O at Ibadan. That experience helped her to discover what she wanted to do as she discovered at the long run that she loves making clothes.

However, after getting married with kids, she took a break from the clothing business to be a full-time mum in order to spend time with her children. However, the idea that metamorphosed into the creation of her business, Ruff n Tumble, was conceived when her kids ran out of pyjamas. She then decided to make pyjamas for her kids. Subsequently, she thought that pyjamas could not be the only thing children need. With encouragement from her husband, she decided to take some of her childrens clothing apart to see how they were made and started making clothes for children. At the long run, she advertised to a friend and her sister in law that she can make pyjamas for their children. They showed interest and from there the journey to the creation of Ruff n Tumble started. She later moved on to making play group wears like jeans, t-shirts and skirts for her children. With time, her business started gaining ground as she started selling the clothes to mothers with kids at the play group. Moving on, she enlarged her business coast by taking her clothes to bazaars and reasonable places where she could make reasonable sales. I started in 1996; I was selling from the back of my car. Wherever there was a bazaar, I was there, my table and my suit case, my children and sometimes even my husband. Discovering that the venture of making and selling children clothes was actually a lucrative business, Adenike conducted a market research on consumer preference on children clothing. She did this to know and understand the gap she would be able to fill in the children clothing business. Her market research did not entail hiring a professional to do the work for her as she could not afford it at that time, rather, she drove through the city to observe what other children businesses were selling and what they werent. Her findings revealed that none of them were selling childrens clothing as individual items. So she came up with the idea of selling producing and selling separates for children. From there, she began hiring tailors to meet the increasing demands of the business. She also rented a small shop to create a permanent location and a retail outlet for her business. To get more people informed about her product; Adenike did not rely only on direct marketing, she also devised a plan by using her children as models for her clothes. She would dress them in outfits she has made for sales and take pictures of them which will serve as a catalogue for potential customers . According to her, this was the most powerful and effective advertising campaign ever. People were quick to identify with a Nigerian face, wearing Made in Nigeria outfits. Till date, this has been her advertising line. This innovative marketing strategy was devised at a time when such move was unheard of. It was the first time that anybody had ever marketed childrens clothes like that. Not a clip art of a foreign magazine but actually using Nigerian children, Adenike said.

In the third year, the business has grown as many people started showing preference for made in Nigeria product. She then moved to a shop opposite her business site at the cost of 500, 000 naira ($3, 171) per year. Nike moved into the building all self-financed through profits from the business. She situated the workshop on the first floor and a showroom on the ground floor. For a company that started out of need, Adenikes Ruff n Tumble is today one of the most successful and innovative children apparel companies in Nigeria with outlets carrying its own brands as well as other brands. She has built a reputation as one of the best manufacturers of childrens clothing in Nigeria. Ruff n Tumble is also a strong children clothing line in West Africa. With more than 50 employees and 7 branches nationwide, the business has grown from her home as a creative children clothing line to a lifestyle brand that has transformed into a multi-million naira business with recognition beyond the borders of Nigeria. Apart from this, Ruff n Tumble has transcend beyond making pyjamas and T-shirts to producing socks, jackets, swim wear, shorts, trousers, suits, shirts and other accessories. While targeting young adults, Adenikes have also expanded her business from the Ruff n Tumble clothing line with the introduction of two new brands NaijaBoysZ and Trendsetters brands. This brand was introduced to cater for the unique fashion sense of todays young adults while celebrating the colourful iconoclastic fashion sense of Nigerias emerging youth. One amazing lesson from this trailblazer is that she grew her business at a time when there was no business support system or matured infrastructure necessary to support small to medium businesses in her home country, Nigeria. It has indeed not been a bed of roses so far as she encounters blockage in access to finance at the early stages of the business when she wanted to move the business to a bigger premises despite the fact that the business had been consistently profitable. Her business, however, continues to strive amidst the challenge of unreliable electricity supply, ban on importation of fabric, increasing cost and overheads and human resource challenge, where the people who are coming out of school do not have the real education and what they bring into the business is very little. Through diligence and hard work and creative license which she says has always worked for her, she was able to build a successful venture. Adenikes story proves that it takes passion, strong will and patience to own and run a business in Nigeria. According to her, one of the things that had helped our brand is the fact that we always move with the global trends. Adenike really believes in the African dream , as she is quick to say that investment opportunities abound in Africa.We dont export now. Export to the West African coast, yes, all along the West African coast, yes, but to say, America or to England, Im not interested in it at all. If 40 percent of the 120 million people in Nigeria are children, I have the potential of a huge market here.

She posits that most of the solutions that black communities in places like Nigeria are looking to the west for especially in the area of business can be more effectively proffered and implemented by the people living in the communities because they understand the culture and how the community works. Over the years, Adenike has been featured in the BBC World Documentary of the Year winning entrepreneurial documentary, Africa Open for Business Documentary and was honored as FATE Foundation Model Entrepreneur in 2005. She is currently a mentor of the Fate Foundation and Junior Achievement of Nigeria organisation. She also featured on the CNBC program Dangers and Dollars: Africa the final investing frontier anchored by Erin Burnett who went all the way to Nigeria to interview Adenike for the programme. Will she tag herself successful? Adenike said in an interview: Success for me is a journey. It is not a place you would say you have reached. It is not only about money, it is not about awards or accolades. It is about what you stand for, what your values are. For me, there has to be a wholesome definition to success. The most important thing I did in the past was centering myself in God and His knowledge. It is very important for your spiritual and emotional balance. Are you planning to come out with your own production or explore your Gods giving talent, Nike says, Be focused and clear in your mind about what you want to do. If you set out to do something, complete it. Dont procrastinate. It is also important that you develop yourself. Finish your degree and then you start a whole way of learning. Self development makes you know yourself, your strengths and weaknesses.

The Young Nigerian Entrepreneur Building Africas Response To Zara

Posted on October 21, 2012 VENTURES AFRICA As the second biggest economy in Africa, Nigeria is perceive as a goldmine by investors. Aside from the countrys over 150 million population, its resources, from oil to agriculture and minerals et al are a delight to investors and entrepreneurs. Currently, the crave for entrepreneurship in the country is at a high, and the fever of enterprise is ever present amongst its youths. Budding entrepreneurs trying to creatively present the African brand to the global world are rampant across the streets of Lagos, Nigerias commercial hub. The craftsmen range from Fashion designers to shoemakers, bead makers and the likes. Ventures Africa caught up with one of Nigeria rising entrepreneur, Akintola Akindele, founder of the bandit urban clothing company, he had some experience as a rising entrepreneur in the Nigeria market to share. Tell us a bit about yourself, your background and your brand? My name is Akintola Akindele, founder of the Bandit urban clothing company. I am a 25 years old Business administration graduate of Bowen University. I was born and bred Lagos. Bandit urban clothing co. started out as a hobby and a sort of personal challenge. Every day I go out and see brands with big name churning out monotonous and uncreative design,

basically the only things on their products where logos, so I thought about it, why spend money on clothing with just logos, I believe I have something better to offer. What prompted the creation of bandit urban clothing? The first reason I was tired of the monotonous designs in circulation and secondly I wanted to build an indigenous urban clothing company that can compete at the global level, an urban outfit that can be in the same store with the likes of Polo by Ralph, Tommy Hilfiger, and Gap. Why the name Bandit Urban Clothing? The name Bandit came to me because its revolutionary different not bound by the norm, and thats what we are at the Bandit clothing company, our imagination is definitely outside the box. What will you say is unique about Bandit Urban Clothing? Bandit clothing is unique because its dream brought into reality. Although, it is still evolving but we stand out in our designs and a fact that we are getting to be known for our designs. We are conversation starters, something to break the ice and when we introduce all our range of products we will still be different. Not different as to be shocking but in a refreshing way, we intend to change how people see urban clothing especially coming from an African brand that intends to go global. Your target market? Our target audience varies but they must be hip and young at heart, so age is not a barrier. But if we are to peg, I will say from ages 15 to 45 and in that age demograph, we have different designs targeted to different types of people: the nerds, the fun lovers, creative folks and the proudly patriotic to name a few. What does your brand have to offer the African market? The first thing is Pride, we are Africans and we are a very creative race. Take the pyramids for instance, we built that Africans built that and yet we do not have any urban clothing company competing at the international level. I intend to launch Bandit urban clothing company to the international market. When you say Africans do not have any urban clothing line competing on the global scene is that a fact? I do not have much facts to back this, but to be candid the concept of an indigenous urban clothing company is pretty new to the design scene. Although we have a couple old timers like Hypno ,O Shady and Marco Martinez, the only one on that list thats still vibrant is Marco Martinez and hes not competing on the International scene. The Ama Kip Kip brand is good too, strong presence on the African scene but yet to blow out, until we have designs and urban clothing companys out of Africa that can go head to head, with Gap, Tommy Hilfiger, Ecko etc we still have a lot of work to do. Who are your mentors in the fashion industry?

Amancio Ortega founder Of Zara, really inspirational story there. Ralph Lauren, and P Diddy aka Sean combs founder Sean Jean because really if theres something known as the male fashionista that will be Diddy and Mai Atafo not as a mentor more like an admired colleague. I like his jackets.In Africa, Well I will say I like Deola Sagoe, Mai Atafo and Uche Nnaji of Ouch I admire what they are doing for the fashion industry. Any challenges starting up? Well apart from having to provide almost the basic infrastructure needed in production by myself, the toughest challenge was getting people to accept the work of an upcoming designer but we are getting past that. How was the clothing market like, starting up? The fashion industry is made up of various types of people but one thing Im pretty certain and we can all agree on is that the fashion industry is fun and thats one of the greatest benefits of being in such an industry where your work is fun. The people here are always helpful and ready to lend a hand, Where do you get your inspiration from? I get inspiration from everywhere. I could be taking a stroll and see something interesting, I work with it, add a few touches and voila! its ready to wear or from conversations with people. Thats why I have a very mixed circle of friends, we all have different perspectives. Who are your favourite designers and what have you leant from them? My favourite designer of all time will be Amancio Ortega, the founder of Zara. Do you know he opened his first store at 27/28 and he was a shop attendant from age 14? What have I learned from him? - Perseverance and the power of belief. Thats a man who triumphed against all odds from a lowly beginning in Spain to secure a place among the first on the wealthiest Forbes list. What are some of the most rewarding experiences and the biggest challenge you have encountered as a business owner/fashion entrepreneur? Well my most rewarding experience, sometimes Im in a random location and someone comes in wearing one of my designs, it makes me so happy that I had a part in it and someone thinks its good enough to be seen in. My challenges will have to be infrastructure and the fear of piracy. You labour over a design, you create it and someone steals it to undermine your original design. Also financing of the business could be a little tricky. How do you get people to know more about your brand? We are partnering with various syndicated individual and online stores at the moment, and that is helping us cut across varied market demograph. How is your sale/ delivery market like?

It is pretty good but could be much better so we have partnered with different stores and online franchises like Jumia.com and 3stiches.com and we are working on a couple more as we speak Traclist, Gidimall etc. How do you get materials for clothing? All clothing materials are sourced internationally, so as to ensure our products are up to the international standard. How do you source materials internationally? We want our T-shirts to be of international standard, so we buy them in bulk from Europe and also most of the materials used for our illustration comes from the united kingdom. And the next set of designs that we shall introduce into our collection shall be produced from china where most of the other international brands produce their clothing. What is the cutting edge you think Bandit Urban Clothing has above its competitor? The quality of our products are top notch and the contributions of our ever valuable creative and design team. What is Bandit Urban Clothing up to now? Right now we are into expansion. We have carried out our preliminary market awareness, so right now we are ready to expand all over Nigeria and Africa next year. We are searching for reputable partners to work with. Where do you see Bandit Urban Clothing in the near future? As a top urban clothing company not only competing with the very best but accepted by all internationally Philosophy or favorite business quote? I will like to quote Henry Ford. Unless you have courage, a courage that keeps you going, always going, no matter what happens, there is no certainty of success. It is really an endurance race. Advise to other young entrepreneurs coming into the business? Work hard, believe in yourself, it will not be easy but it is very rewarding and fulfilling. Also avoid the dream killers, you can do it.