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South Africa: prestige retailing Market watch: Africa Changes afoot More changes are set to hit the retail scene credit: istock in South Africa by Alex Wynne hile the prestige beauty retail scene in WSouth Africa has the air of the developed market about it, with several hundred department-store doors competing for the beauty consumer’s rands, changes are afoot. The biggest retailer, Edcon, which operates the Edgars and Red Square chains and is said to account for 50% of the market, is revamping stores and reviewing its beauty offer, notably by bringing in exclusive brands. The company refused to provide information on its new beauty strategy. According to industry sources, Edcon has been particularly hard hit by the credit crisis in South Africa, since a large proportion of its business comes from the credit it offers to consumers, which it has had trouble recouping, resulting in a negative impact on margins. However, bringing in exclusives and independent brands is not as easy as all that. Retailers’ dependence on Estée Lauder Companies’ portfolio over the years has meant that there have been few opportunities for smaller brands to enter the market, and little support or space for them when they did, according to sources, although this is changing. Metropolitain Cosmetics has worked on a store-in-store concept to expand into department stores, but so far, negotiations have not been fruitful. “We would like to team up with [department stores] to expand to the s Metropolitain Cosmetics (top), which offers a wide range of niche brands, plans to regions, as the country is huge,” says Moulin open new stores in Cape Town and Pretoria next year. Edgars (bottom) is revamping Service, too, is increasingly becoming a key its stores and reviewing its beauty offer. differentiator for retailers in South Africa, and various players have found that implementing a great team—so great that the competition “We must be in the different malls because better beauty advisor training has paid off. wants to hire them,” says Sisley regional the demographics are very different,” says “It requires a lot of time and training,” says director for the Middle East and Africa Sébastien Moulin of the retailer’s four stores. Sandton, he Metropolitain Cosmetics co-founder Wilfrid Gautier. “That’s a good sign, but it’s also a little says—Africa’s biggest mall—has extremely Moulin. “But it pays off in the long run, with dangerous as well.” high footfall and a diverse, mainly non-white people very willing to try out new products. consumer base, with a 50/50 breakdown Skincare is performing very well because we Adapting the offer between male and female customers, while focus on service.” Industry players warn that it is essential to take Hyde Park Corner is more high end, for example. On the downside, well-trained beauty advisors into account the diversity of the market— Metropolitain has plans to expand its concept to are hot property and competition is rife between consumers can have very different profles from Cape Town and Pretoria over the next year or so. retailers and brands to recruit them. “We have one mall to the next. But while major cities Johannesburg, Pretoria 60 September-October 2014 - N°19 - BW Confidential