o_18thitrba1dr417tbpqe1soiuvva.pdf

p24 :: Industry
Cape Union Mart chairman Philip Krawitz and CEO Andre Labuschagne explain why they are optimistic about trading through the recession.
How a mom & pop store
became a major chain
Fifty years ago, when asked to identify
a typical mom and pop store,
Capetonians would most likely
have pointed to the Cape Union
Mart store, nestled between the
huge OK Bazaars and Woolworths headquarters.
Here, customers would feel right at
home, rummaging through the clothing and
gear, from anchors to toothpicks, stacked on
rustic shelves, because they were assured of
personal service.
Nowadays, when asked to identify a worldclass,
cutting-edge, South African retail chain,
consumers will most likely name Cape Union
Mart. The stores, and spin-offs Poetry and Old
Khaki, are now found in most shopping malls
... but still aim to create that at-home, personalised
shopping experience.
How did this mom and pop store become a
leading retail chain, carrying the top brands,
over an 80-year period, when many other independents
closed their doors?
Current chairman Philip Krawitz, the founder’s
grandson and namesake, is a raconteur
who explains business and personal philosophies
with parables that provide fascinating
answers to the question: how did they bridge
the gap between a single army and navy type
store to a 140-plus store empire, which employs
2,000 people, and achieves double-digit
growth every year?
For the first 50 years, the Krawitz family
owned one store. By 1990 it had grown to
eight, and at the turn of the century they had
18 stores. Then the floodgates opened. In the
Sports Trader :: 2014 March
past two years they’ve opened something like
20 new stores across the three brands — in
the last quarter of 2013 they opened ten new
stores, and another ten opened in the first
quarter of 2014. And there’s more to come.
In 2011 Krawitz appointed Andre Labuschagne,
a CA with extensive retail experience,
as CEO, while he became chairman. “I
wanted to bring in some fresh thinking, without
losing the company’s sense of family. We
needed an entrepreneurially-minded person
who had a very strong track record in retail,
who was passionate about a family-like business
culture, and who was equally committed
to the notion of leaving a legacy of doing good
business.”
While they previously mainly opened stores
in shopping centres in cities, Labuschagne saw
new opportunities in smaller towns — and was
proved right by the success of their new Cape
Union Mart stores in Brits and Upington.
While he believes this expansion into smaller
towns works well for a general outdoor store
like Cape Union Mart, the population of smaller
towns does not always warrant the expansion
of specialist stores like Poetry and Old Khaki.
Poetry, which they aim to make the favourite
store of the sophisticated lady, and the
Old Khaki brand stores, were the brainchild of
creative director Ken Lazarus “He is our ideas
guy, delightfully nutty, a creative genius,” says
Krawitz.
Launched in 1999, the Old Khaki leisure
brand became so popular that it now has more
than 40 stand-alone stores. The first Poetry
store, launched in 2008, has grown to 20.
The beauty of the Old Khaki and Poetry
stores are that they are small, and therefore in
high demand by shopping centre landlords who
often need to fill the space vacated by small
stores that closed down, says Labuschagne.
Opening new stores in close proximity to
existing ones don’t affect foot traffic, he
found — but, not having a presence in a new
shopping centre, will affect sales. “Retailers
always overestimate the effect of cannibalisation,
but underestimate the effect of a new
shopping centre opening,” he says. “The shopping
centre is the destination — if you’re not
there, you can’t draw the shoppers.”
For a single store to become a destination
requires something extraordinary, says Labuschagne
… like the huge Canal Walk Adventure
Centre, which became a destinational
store because it offers a truly unique shopping
experience, as well as family entertainment.
Trading in recession
While most South African retailers look back
on 2013 as a very tough year, they are optimistic
about trading conditions, especially since
South Africa has a growing population whose
salaries are increasing, creating a better educated
middle class, with aspirational values.
Trading in a recession actually has several
benefits, says Krawitz, citing their Triple-S
strategy. In a recession they:
• find the very best staff because in boom
times you have to compete very hard to find
decent staff;