Fashion sense: Clothing firms change tack in fading market
By Wainaina Wambu
| September 14th 2021
Fashion has not been spared from the retail turbulence witnessed in the country in the last few years.
Local brands such as Deacons and K-Shoes have gone bust, while once-promising ones like Jade Collections are barely keeping their heads above water.
This has forced players to rethink their business models in a market dominated by mitumbas (second-hand clothes) amid consumers’ waning purchasing power.
Last year, a study on Kenya’s fashion Small and Medium Enterprise (SME) ecosystem described it as “messy and poorly informed” and tough to understand.
“The Kenyan fashion market (men’s and women’s wear) has been described as complex and somewhat complicated and hard to figure out and satisfy,” said the Fashion DNA Needs Analysis study commissioned by the British Council.
Perhaps this complexity explains Mavazi Lifestyle Clothing, once present in most Tuskys outlets.
Curiously, even with the retailer’s troubles, the fashion offshoot has managed to break away and seems to be expanding while other fashion retailers suffer.
From less than six branches early this year, it has grown to 16 stores, comprising supplier stocks from the aggregator partners and shareholders capital.
Mavazi Clothing Operations Manager Florence Mukuha said the firm is pursuing partnerships alongside an aggregator business model to sustain the firm’s growth. It has a variety of more than 5,000 store keeping units (SKUs) and aims to have stand-alone outlets in all major towns across the country.
“Before, we used to target malls, but we’ve seen that malls aren’t doing well so we want to target stand-alone stores, which perform better,” said Ms Mukuha.
Mavazi Clothing has maintained a collection of suppliers, providing quality items and merchandise with an aggregator business model that also seeks to create a tight-knit supplier channel.
Suppliers are informed on every little thing going on in the retailer. The retailer also constantly reviews stock, pricing and branch performance to eliminate non-performing merchandise and also keeps abreast with fashion trends.
Unlike in the traditional retail model, aggregator suppliers provide sales items on a consignment basis, with the products remaining in the control of the suppliers and payments whose terms are dictated by the suppliers settled promptly.
The aggregator business model is touted by global e-commerce players offers as a win-win platform for SMEs wishing to grow their business value by partnering with an established aggregator. An established aggregator such as Mavazi Clothing handles the sales and marketing functions through a network of physical and online retail outlets.
Mukuha said they do a constant evaluation of stock, pricing and branch performance, adding that they operate independently from Tuskys in a bid to build a distinct brand.
The store offers clothes for all ages.
“We have the variety and the quality that customers can trust and the price is friendly and also for the whole family,” she said.
Clothes suppliers who spoke to Financial Standard said the current turbulence in the local retail space and the Covid-19 pandemic have greatly impacted their businesses.
Nicholas Chiera noted that the Mavazi model has brought the best suppliers specialising in particular products together.
“You’re not leaving it to one supplier to cater for products across the board; that’s where the problem comes in. A consumer gets the best of everything from ladies’, men’s, night and swimwear,” said Mr Chiera. Another supplier, who did not want to be named, noted that in the last two years, things have been difficult and made worse by the Covid-19 pandemic.
The pandemic, said the supplier, has occasioned supply chain challenges in sourcing, shipment costs and currency fluctuation.
Another supplier, who only identified herself as Mrs Njoroge, explained that she uses the consignment model where the goods on a retailer’s shelf belonged to the supplier. She lamented that in the event a retailer goes bust, it’s her merchandise and not the retailer’s that gets auctioned.
At the close of last year, Jade Collections shut down its Haile Selassie branch, one of their biggest in the Nairobi Central Business District (CBD).
This followed the shutting of its Westlands Branch in upmarket Nairobi. The retailer had been operating eight branches, including three in Nairobi’s CBD, Mombasa Road, Thika, Eldoret and Kisumu.
Jade Collections said it was in a restructuring process to weather the pandemic. This involved relocating to smaller spaces to cut down on rents and other overhead costs.
The move saw the fashion retailer take up space in supermarkets, including at Quickmart’s Waiyaki Way branch. However, this did not work out, and Mavazi eventually snapped up the space once it fell vacant.
Bernice Mburu, the founder of Jade Collections, didn’t respond to our calls and messages for comment.
Deacons, Kenya’s first indigenous fashion retailer at one time listed on the Nairobi Securities Exchange (NSE), also went bust and is up for liquidation.
The journey for Nairobi Business Ventures (NBV), the first footwear firm to list on NSE in 2016, also ended in a baffling trail of losses.
Its founders had envisioned a ready market for 10 million pairs of shoes annually. The shoe and leather business dream is now dead, with the investor – Delta International FZE – moving NBV into industrial production, away from consumer goods.
Some foreign fashion retailers have also not been spared, complaining of dollar-based rents pushing them out of business.
South African fashion retailer TFG, which has four stores, is set to exit Kenya due to the new demand.
TFG Group Chief Executive Anthony Thunström said over the last six months, the government had increased import duties, in some cases doubling them.
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