South African retailers marching to our shores

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

Advertisement

This was published 7 years ago

South African retailers marching to our shores

By Carolyn Cummins

South African-based brands are the latest wave of offshore retailers eyeing Australia as an expansion market, attracted by its proximity, similar climate, matching seasons and consumer outlook.

Woolworths Holdings led the way with its purchase of David Jones, Mimco, Country Road, Politix and Witchery, and now other brands are following.

This is despite the small and highly competitive Australian retail landscape being notoriously tough and 16 retail brands having hit the wall in the past year.

One of the latest to enter is the Foschini Group (TFG), one of Africa's oldest companies, with 22 retail brands spread across 2700 stores including fashion, footwear, jewellery, cosmetics, telecommunications, homewares and furniture.

Inside a Shoprite Holdings Ltd. store in Cape Town, South Africa. The brand is eyeing off Australia.

Inside a Shoprite Holdings Ltd. store in Cape Town, South Africa. The brand is eyeing off Australia.Credit: Dean Hutton

TFG are located in South Africa, Ghana, Nigeria and Zambia, while a selection of their TFG brands can be found internationally in over 19 countries.

TFG also operate the Netherlands-based G-Star Raw businesses in Africa under a licence agreement. As part of its Australian expansion, TFG has recently signed a franchise deal with G-Star Raw in Australia.

Alastair Davies, the head of G-Star Raw in Australia, sbig ways the name will be retained but TFG will use the agreement as its springboard into Australia.

"The Australian market and climate is very similar to South Africa and we see it as a good growth opportunity," Mr Davies said

Advertisement
An employee places a sales sign in the window of a G-Star Raw Denim SL fashion retail store on Oxford Street.

An employee places a sales sign in the window of a G-Star Raw Denim SL fashion retail store on Oxford Street.Credit: Chris Ratcliffe

Currently TFG are in negotiations with G-Star to take over the existing 25 G-Star Australian stores that are operated by the Amsterdam-based parent company after taking back the Australian G-Star licence in 2015.

Michael Bate, the head of retail and national director at Colliers International, could not comment on any specific deals but said he has received calls from many new retailers as part of the evolution that is going on in South Africa.

"Many overseas players have seen the success of the international brands in Australia and this has prompted many more to come here and do some research," Mr Bate said.

"South Africa and Australia have close ties and the climate, time zones and season are vey similar."

As a mature market however, South Africa has limited retail expansion opportunities meaning major players have to look to new African emerging markets or international markets through acquisitions and operating licence agreements.

Another South African brand said to see Australia as a promising market is groceries and household products store Shoprite.

The group also operates under other brand names including Checkers, Usave, OK furniture, House & Home, Hungry Lion, Medi-Rite and has 160 outlets in 15 African countries.

Loading

The Edcon Group is one of Africa's largest nonfood retail groups with over 1500 stores and is believed to be one of the possible suitors for Woolworths' Big W business.

South African-based investment group, Brait, has an interest in the global Virgin Active brand and it has been suggested it will use its other large Investment in fashion house New Look UK, to bring the brand into the Australian market by 2018.

Most Viewed in Business

Loading