o_18thitrba1dr417tbpqe1soiuvva.pdf

Industry :: p25
The current Cape Union Mart
chairman and CEO explain why
the retailer, founded 80 years ago
as a single store, became such a
successful retail chain and local
manufacturer
If you treat people like they
ought to be, they become
what they ought to be. If
you treat them like they
are, they stay as they are.
• look at stores — where a store is closing
down, open a new store and negotiate good
rentals;
• put the right structures in place — this is the
time to fix and upgrade your systems
“So, a recession is actually a very positive
time for us, because we open a lot of stores,
employ some absolutely brilliant people — we
have better people now than I recall having in
any other time in any category — and we’ve
got better systems in place than ever before.”
That is why they outperform their competitive
peers, he says: even though they are a
private company, they can compare their performance
to the listed companies and see that
they are ahead in turnover and profit growth.
“In a recession people never stop buying, but
they want value,” says Krawitz. “The heart of
Cape Union Mart, Poetry and Old Khaki, is Value
with a capital V. The garment you buy today
must look good over the next five years. Our
garments are not going to self-destruct, will
not lose waterproof ability, will not curl up,
and the seams will not come adrift. “
Optimism in diversity
“South Africans talk ourselves into a depression,”
he adds. “This country is too good to
fail, no matter what government we have in
power. One of the greatest strengths of South
Africa is our diversity.”
The same applies to the company, where a
diverse group of people are employed. “That
diversity has enabled us to handle tough times
pretty well by having some damn good arguments,”
says Krawitz, who has a sign that proclaims:
If two people around the table agree,
one of them is unnecessary. He encourages
constructive disagreements because the dialogues
lead to better conclusions.
He cites the PAEI Method, developed by prof
Ichak Adizes of California, as an example of
the four archetypal types of characters needed
for a business to function at its best:
P = the producer, the guy that gets things done
on time. “He’s the engine driver, but like the
driver of a train you’ve got to point him in the
Family business with a difference
PhiliP Krawitz’ founded Cape Union Mart in 1933 and was succeeded by his son,
arthur, in the late 1940’s. when he died of a heart attack in 1970, his son Philip had no
choice but to leave university to run the family business. today, Cape Union Mart is still a
true family business — but, with a twist.
they follow the recommendations of a harvard Business School Programme for family
businesses they attended: no family member may be appointed unless they first gained
work experience elsewhere, and have the skills advertised – and they may only apply once.
therefore, when the Krawitz daughters became involved in the business, they brought the
necessary experience, qualifications and skills to add value to the business.
the eldest, Martine Vogelman, has a B.Bus.Sci degree from the University of Cape town
and managed portfolios at investec Private Bank, before joining the family business to help
with strategic planning. She is also involved with range selection. “we gave her the family
portfolio to administer and she got pretty good returns,” says Krawitz.
lauren Gez, the middle daughter, studied at the Fashion institute of technology in New
York and then went to work for top end brands like Kenneth Cole and J-Crew. after returning
to South africa she told her father “it’s a disgrace that you don’t have any clothes for
women and you have three daughters”— and proceeded to style ladies garments for Cape
Union Mart.
the youngest, amanda herson, is a high achiever: at school she was head girl, the first
white junior mayor of Cape town after democracy, got seven distinctions in matric and
graduated cum laude as best student of her year in B. Sci Econ at the wharton School,
an ivy league college in Pennsylvania. after working for the Boston Consulting Group and
Victoria Secret, she completed her MBa at harvard and joined highland Capital Partners in
the US before being invited by her father to visit Cape town during the 2010 FiFa world
Cup tournament.
the hersons — her husband Marc, who she met at harvard, is a fellow South african —
predictably became homesick and when the person who ran the new business division at
Cape Union Mart left, she applied and got the job. after the birth of her two sons she took
on a new challenge, and now heads up their online business.
the next generation — the grandchildren — inspired the kids’ range, which has been tremendously
successful, says Krawitz.
right direction to get him to the right station.”
A = the accountant, who wants everything
done precisely and correctly.
E = the entrepreneur. “He is your dreamer, full
of ideas, who lights fires all over the place.”
I = the integrator, or a human resources type
of person “who’ll wait for everybody else to
put up their hands before they vote.”
Unless you can get those four types of people
into a similar space and create conflict,
your company will be dead, says Krawitz. The
leader’s role is to build a team.
“After 43 years I learnt something very important:
the smartest thing in business is to
realise you are not the smartest guy in the
realm. Rather employ people who are much
smarter than you and ensure that they play
nicely together.”
At Cape Union Mart it is Labuschagne’s job
is to make sure that “the brilliant people we
employ play nicely together”.
Local manufacturing
Another strength is that they are one of the
few retailers who started manufacturing locally
by opening their own factory. And despite
the job losses suffered by many other local
manufacturers, they are proud that they never
needed to retrench an employee.
“Our factory has grown enormously and we
turned out close to 450 000 garments in this
financial year — high value, highly technical
garments,” says Krawitz. “We are producing
better garments than what you will find in any
other factory in the world.”
The greater flexibility and speed to market
offered by their factory gives them a competitive
edge. But, raw materials are a challenge,
he admits and says “it is absolutely ridiculous
that at this stage South Africa still has high
import tax on textiles that are not available
here.“ It’s essential that any fabric not produced
locally should be imported duty free.
“We have the ability to create quite a viable
manufacturing market here,” adds
To p26