South Africa’s changing fashion landscape

It’s difficult to understand whether international fashion and retail brands have ambitions to stay or go in South Africa. Certain ones such as Mango, Nine West and River Island have shut down their brick and mortar stores. However, H&M are engaging in an ambitious expansion plan.

Moneybags journalist Jessica Anne Wood looks at the changing fashion landscape in South Africa. In light of so many international brands pulling out of the country, we speak to Pär Darj, H&M’s country manager for South Africa about the company’s plans for expansion.

Saying good-bye to old fashion favourites

Have South Africans lost their love affair with international brands or have they lost their love for us? Mango and Nine West (both owned by The House of Busby) have closed all their independent stores, as well as a number of brands stocked by Edcon that are considered unprofitable. These brands include Geox, Express, Lucky Brand, River Island, Tom Tailor and One Green Elephant, to name a few. Stuttafords, which stocked international brands, has also closed its doors.

Edcon made the announcement that it was pulling these brands from its stores in May of this year when it released its unaudited financial results for the previous year.

Among the reasons named by the international brands and retailers for shutting their doors, is financial concerns, and shrinking profits. The House of Busby CEO Mark Sardi told Fin24 that the decision to close the Nine West and Mango independent stores came after considering their financial performance.

An Edcon spokesperson told Moneybags: “The external retail environment has certainly seen considerable change over the last two years, especially with a very constrained economy. Online retailing is moving ahead quickly and all retailers are adapting their service and product offering to ensure that customer convenience and accessibility (whether in-store or online) remains paramount.”

The spokesperson added: “Edcon has enhanced the online offering for certain of Edcon’s brands, and is moving away from the many international brands the company offered. Edcon has remained focused on those international brands that were in demand from Edcon’s customers (such as TopShop/TopMan, TM Lewin, etc). It has also resulted in a bigger focus on Edcon’s Private Label brands (such as Kelso, Stone Harbour, Free 2bu, etc). This means that local procurement has, and will continue to be, increased as well.”

With the country currently facing financial challenges, with the credit ratings downgrades recently taking place, consumers are more cautious with their spending. However, despite this, other brands are expanding and growing their footprint in the country.

H&M grows its South African reach

Before the end of the year, H&M is set to open six new stores in South Africa. Since the brand first arrived in 2015, it has opened 11 stores around the country to much hype and fanfare. The new store locations and their opening dates are:

  • Cavendish Square – Cape Town on 16 September 2017
  • Table Bay Mall – Cape Town on 28 September 2017
  • Highveld Mall – Witbank on 28 October 2017
  • Boardwalk Inkwazi Shopping Centre – Richards Bay on 11 November 2017
  • Canal Walk Shopping Centre – Cape Town on 18 November 2017
  • Gateway Theatre of Shopping – Durban on 23 November 2017

And these are not the only new stores on the cards. While no locations have as yet been confirmed, H&M South Africa has stated that more stores will open in 2018. So why is H&M the exception?

Darj told Moneybags that South Africa is a location that H&M had looked at expanding to for a number of years. Despite the market taking a downturn, he says that “South Africa is a fantastic market with a lot of fashion clothing retailers. There are a lot of stores, so we can see that there is a huge interest for fashion. South African people are very fashion conscious.”

With the first stores opening at the V&A Waterfront in Cape Town and Sandton City in Johannesburg in 2015, Darj claims that there has been a fantastic response at all the openings since then.

“When the market is tough, as it is now, that’s a short term problem, and we can’t time our entrance [based on] where the Rand is going towards the Dollar or how the local consumer situation is for a couple of years. We are here to stay, and we get fantastic opportunities from landlords. Short term is a bit troublesome, but we will get through this,” believes Darj.

The openings of the new stores before the end of the year look set to be big events. “[At] the flagship stores, we will have a bit of extra actions, which is Gateway and Canal Walk, but the rest we will have the same as Somerset. We have a lot of opening offers and we have giveaways to the people who are lining up. We have a very happy and fun opening weekend. We are very much looking forward to this,” Darj explains.

Edcon looks to future growth

Despite discontinuing some of the international brands that it stocked, Edcon confirms that there are many brands that it has retained. These brands are, according to the Edcon spokesperson, well received by customers.

However, a focus for Edcon at this time is also on its private label brands with some stand-alone stores, such as the opening of a Kelso store in Cape Town, with other stores being planned.

“Edcon is listening to its customer base far better than in previous years, and customer needs, likes, dislikes and demands are being researched and monitored on a regular basis, which will direct Edcon in its future product sourcing,” explains the Edcon spokesperson.

Staying relatable in an increasingly connected world

In a world where many people have the belief that if it isn’t online it didn’t happen or doesn’t exist, it is important to stay relevant and connect with your consumers. Darj agrees: “I definitely think that is one of the key issues, to be in contact with the consumers. But you also have to have something to talk about and present. So our model, with new garments coming into the store every day, gives us always new things to talk about.”

Edcon recently launched its online shopping portal for Edgars, following other Edcon brands CNA and Boardman’s. According to the Group spokesperson, the use of the portal has exceeded expectations. “We are pleased with the growth.”

While different Edcon brands cater to different consumer groups, the spokesperson notes that for some of their brands, there is a good demand for an online offering, while for others people prefer to shop in-store.

Facebook, Twitter and Instagram are just some of the social media platforms used by big brands to connect with their customers. But the trick is to give them something new and interesting to interact with.

Making designers more accessible

In 2015 the likes of Louis Vuitton, Gucci, Hugo Boss and Prada closed many of their stores in China, and in the US stores such as Ralph Lauren, Guess, Sears and Macy’s are also closing some of their stores. Michael Kors recently announced that it will be closing some of its stores, with one store at the V&A Waterfront, however, the stores that will be closing have not yet been named.

With these designers reducing their footprint, it may make them less accessible to many people, who aren’t prohibited by the high price tag. Stuttafords, while not stocking all of the big name international brands, had an impressive collection of designer labels in stock. With the stores now closed, consumers may find it harder to find some of their favourite brands and designers.

However, H&M is making some of the world’s top and well-known designers more accessible to the masses, and at a reduced cost too. Since its first collaboration with Karl Lagerfeld in 2004, H&M collaborated with a number of designers, including Stella McCartney.

“Since we started with Karl Lagerfeld we have done a big number, and it’s amazing how people are being happy that H&M are enabling them to get a Lagerfeld piece or a Stella McCartney piece for a small amount. It is for the fashionistas who have an interest, but don’t have the means to buy a proper [Roberto] Cavalli piece or a Jimmy Choo piece,” says Darj.

He adds: “Sometimes we have more famous ones and sometimes we have more upcoming ones, but what has happened in the established market is, if they haven’t heard the name they think, ‘this is something very interesting’. We’ve had a fantastic response to our designer collaborations.”

This year’s collaboration is with Erdem and is set to be released on 2 November. It will be available at the H&M stores at V&A Waterfront and Sandton City.

Erdem is the latest designer to collaborate with H&M.

Erdem is the latest designer to collaborate with H&M.

While images and details of the collection have not been released yet, a teaser trailer by Hollywood director Baz Luhrman has been released, allowing a glimpse of what consumers can expect.