JOHANNESBURG, South Africa — For two weeks before the new year, South Africa held its breath. The scandal-hit president Jacob Zuma was stepping down as party leader and his successor would determine the country's future — either major economic reforms with Cyril Ramaphosa or preserving the status quo with Nkosazana Dlamini-Zuma.
"When Cyril won, hope came flooding back," says Lucilla Booyzen, the director of South African Fashion Week (SAFW). "The country has gone through an impossible time, but it feels like we could be on the brink of change. Any message that says 'we are all working together' will create new horizons for designers — you open your pockets when you aren't scared, and I believe the element of fear has been lifted by Cyril."
This sense of renewal will be on display at the upcoming SAFW, which is held in Johannesburg from April 10 to 15. Organisers are making special plans to celebrate the life of Winnie Mandela, who died last week. Under Booyzen, SAFW has been integral in promoting the work of the country's designers — and the increase in consumer spending that is forecast over the coming year will have a major impact on their growth.
"Ramaphosa is seen by many as an antidote to the economic and political challenges that we currently face," says Babongile Dlamini, PR specialist at MIR PR & Events and former media relations officer for Woolworths. "He is an experienced technocrat and successful businessman, who is widely respected and — according to surveys — his tenure has already ushered in improved business confidence. Consumer confidence will likely also recover and it's expected that fashion retail sales will improve."
South Africa is currently luxuriating under what has been described as the ‘Cyril spring’
Like the rest of the nation, the fashion industry has had much to contend with over the last few years. According to his critics, Zuma drove South African to breaking point. In 2016, the country's economy was roughly the same size it had been in 2009 — according to the World Bank — and 24 years after the end of apartheid, half the population still lives in poverty.
The lack of growth has been blamed for South Africa's particularly poor 2017 retail results and even for lacklustre sales across parts of the wider African continent, where the contagion spread. South Africa's fashion firms have also cited low consumer confidence, corruption, unsure leadership and low foreign investment for their inability to expand. Mr Price Group reported a drop in headline earnings in 2017 for the first time in 16 years, falling by 3.6 percent, as did Woolworths, whose stock price fell 17 percent last year.
The country's long-established garment industry, meanwhile, has been suffering since the millennium, when the free market policies of the World Trade Organisation opened South Africa's economy to an influx of imported goods and competition from Asia. The result was mass factory closures — according to Statistics South Africa, garment industry jobs fell from 220,000 in 2002 to 100,000 in 2011.
Over the last few years, international brands have also stalled expansion into South Africa because of the country's near-recession. While brands such as Burberry and Gucci have stand-alone stores in Cape Town and Johannesburg, many other top tier labels have not yet made it to South African shores. Despite this, no new international fashion brands arrived in the country last year.
The domestic fashion scene, by contrast, is flourishing in creative districts of Johannesburg, Cape Town and Durban, but has not yet enjoyed the same degree of international success as the design or art industries.
Hope for a new economic dawn
To mark the end of what has been a long economic winter, South Africa is currently luxuriating under what has been described as the 'Cyril spring' — the sense of hope and renewal is palpable across the country.
As the man himself proclaimed in the state of the nation address in February, "A new dawn is upon us." Ramaphosa has long been heralded as someone equipped to help South Africa in times of need. Nelson Mandela turned to the former trade union leader when he needed a tenacious negotiator to lead talks to end apartheid and was rumoured to have wanted him to succeed him as president.
To his supporters, Ramaphosa's immense business success means he is up to the task of turning around an economy grappling with 28 percent unemployment and credit rating downgrades.
He won on an anti-corruption, pro-economy ticket, and the key measures he laid out include a targeted 3 percent economic growth in 2019, up from 0.7 percent this year, institutional stability to lure in overseas investors and manufacturers, and a new tax code and regulations for small businesses.
These measures will no doubt have an impact on the South African fashion industry, which still underperforms in relation to the size of the economy. However, the indicators that it could flourish are all there. While Nigeria has a larger overall economy, South Africans remain the wealthiest on the continent, with twice as many millionaires as any other African country. Last year the local luxury sector generated a revenue of approximately $2.2 billion, notes the AfrAsia Bank South Africa Wealth Report, while the ready-to-wear designer slice of the market is estimated to be worth $600 million.
And then there is the local talent. Nicholas Coutts, Thebe Magugu, AKJP, Lukhanyo Mdingi, Joel Janse Van Vuuren and Avant Apparel are creating a bold new South African aesthetic. More established, much-loved local names who deserve to grace the pages of glossy international magazines include MaXhosa by Laduma, Kluk Cgdt, David Tlale, Thula Sindi, Stefania Morland, Black Coffee and Marianne Fassler.
Many of these brands are creating a new South African style by playing with Zulu, Xhosa, Afrikaans or Cape cultural identities. And with a long overdue global resurgence of interest in all things African, fashion could easily follow the path art has and cross-over into the global marketplace.
"I travel a lot and I find people in the US and Europe are fascinated by African designs and want to see more of it," says Hanneli Rupert, the owner of Okapi handbag brand and boutique store, Merchants on Long. "But we are so geographically distant that young designers don't have easy access to the international market. Because of our competing fashion weeks, buyers from abroad don't know when to come here. We need to find ways around this as now is the time to expand, while African design is on everyone's radar."
Each March, South Africa hosts Africa Fashion International in Cape Town, which is run by Precious Moloi-Motsepe and aims to showcase exceptional pan-African creative talent on a global stage. However, despite the infrastructure that has sprung up around these two fashion weeks, South Africa still lacks a centralised fashion council, so it is currently left to brands to organise their own marketing drives, with many of them focusing on other countries in Africa over the West.
"We definitely have expansion plans in the works," says Laduma Ngxokolo, the designer behind local knitwear brand, MaXhosa by Laduma, who has already dressed international stars such as Alicia Keys. "Nigeria, as well as Kenya are some of the best emerging markets for us. And we shall be looking at opportunities within the Africa diaspora. In terms of expansion, the American market also has an appetite for MaXhosa."
"Economically, Ramaphosa will have a drastic impact and it will change the industry," says Ngxokolo." The fashion industry used to boom in the '90s, and that changed and lot of jobs were lost. I hope and think the current change will bring jobs back and that we will have another bracket of fashion — African luxury. There are many viable quality products to export, we had a lot of barriers to entry for the past ten years or so, I think things may become a bit easier."
The OECD has revised its GDP growth rate forecast upward to 1.9% in 2018, and 2.1% in 2019 – higher than the growth rate currently targeted by South Africa's National Treasury. Although this is modest compared to some emerging markets, it is a welcome return to growth after heading in the wrong direction for so long.
According to emerging market intelligence firm BMI, Ramaphosa’s government has made “a strong start” in addressing some of the most obvious challenges facing the country, including an increase in the rate of VAT in the latest budget and an acceleration of an anti-corruption drive. In the firm’s latest update, analysts declared that “while our core view forecasts relatively tepid growth in South Africa in the coming years as political infighting undermines efforts towards implementing much-needed reforms, we believe that risks are skewed to the upside.”
The strength and stability of the economic growth outlook will depend on key indicators like Ramaphosa’s ability to control inflation. In order to unlock stronger investment into the country, the government will need to deliver on substantial reforms, particularly those concerning the inflexible and unproductive labour market.
From zeitgeist to export
South Africa-made fashion may not yet have achieved truly global success, but it has become an important part of the local zeitgeist, with politicians, actresses, musicians and other high profile figures in the country supporting home-grown brands on social media and creating a cachet in wearing 'proudly South African' clothing.
"Our retail industry is driven by the breadth and depth of local talent," says Dlamini. "South Africa has a fairly mature fashion industry ecosystem that includes an abundance of talented designers, specialist tertiary education institutions, best-in-class production facilities, informal and formal retail trading opportunities and highly receptive consumers. Having said that, there is a lot more than can be done to support small-to-medium independent fashion designers. There is also room for an updated vision for the future of our textile manufacturing industry."
In order for independent South African brands to create a viable route to mass commerce, the country urgently needs to create a sustainable local supply chain. Equally, Ramaphosa is under pressure to find jobs for the millions of people who are currently out of work. Reviving apparel manufacturing could be a step in the direction to solving both issues.
"Unemployment has been a devastating problem, but it is something fashion can help fix," says Jackie May, a fashion commentator and the ex-editor of Marie Claire South Africa. "The growing retail industry has the potential to help right one of world's most unequal societies."
One suggestion by the Centre for Development and Enterprise is to develop an export-only processing zone in the Eastern Cape. The proposed zone would focus on low-skill manufacturing, including clothing, by establishing employer-friendly market rules in the hopes of attracting both domestic players and international fashion brands to a manufacturing hub that could compete with African and Asian countries. This means workers could be hired on low wages and part-time, bypassing South Africa's strict labour laws.
Consumer confidence will likely also recover and it’s expected that fashion retail sales will improve
Businesses in the zone would have to export everything produced to ensure they weren't competing with local manufacturers, who would still be obliged to pay the minimum wage — one that will soon rise to 20 Rand ($1.66) per hour, higher than countries such as Cambodia and Ethiopia.
"I'm unsure about this plan," says May. "Since the Rana Plaza disaster in Bangladesh (when a clothing factory collapsed in 2013, killing 1,138 people,) the world has woken up to the importance of fair and safe working conditions. And while I understand that a low-paid job is better than no job, we should insist on a liveable wage for everyone."
But while international manufacturers need to be lured to South Africa with schemes, local retailers should need no such enticement. Despite the arrival of Zara and Topshop on local shores, many of the major fast-fashion players in the country are South African. These include Woolworths, Foschini, Mr Price, Edgars, Pep Stores and Ackermans, who continue to appeal to a significant slice of the domestic market, as well as the regional southern African one.
"South African manufacturers have been desperately hunting for the cheapest possible sourcing solutions, first in China, then in Mauritius, Madagascar, Bangladesh and so on," says Paul Hillard, the head of marketing and sales for Cape Town-based TCI Apparel Group.
"But in doing so, they forget the high cost of sourcing overseas — shipping, import tariffs and storage all drive prices up. As a result, we overproduce the wrong products and have a huge, wasted inventory each season that stagnates in warehouses around the country. And at the end of it, our clothes are still not cheap."
Around the globe, there is a visible trend for manufacturing moving closer to end market. South Africa, geographically distant from factory hubs with a growing middle class and popular local fast fashion brands, is a country ripe for domestic manufacturing investment.
"When I look at quality of local design I'm exceptionally proud — the talent is here, but we need to drive it in a commercial sense," says Hillard. "We have a massive potential future ahead of us, but we need a supply chain that is sustainable and all-encompassing, with an organised selfless body to pull it together. One that isn't driven by [its own] commercial interests and that could help supply chains to grow, letting manufacturers partner with local mills and promoting and developing local farming."
The natural resources are there. South Africa is already the world's second-biggest producer of the wool variety used for clothes, and its exports look set to surge by 50 percent to 75 million kilograms in the next three years as demand for the material increases.
"We have been waiting for someone like Cyril for a long time," says Louis de Beer, the director of the South African Wool Association. "We have gone through tremendous upheavals, but there is now Cyril-wide support across the country. However, to impact an industry like ours, you need deep pockets. Belarus, Turkey and China — all these countries had government initiatives that have helped them get to the place they are now. We would be very excited about future government policies but we have no indicator that they're coming."
The question of import duties is a controversial one among industry leaders as South Africa continues to operate under an exorbitantly high tariff structure. And while there has been talk about a special economic zone with Zimbabwe, under the newly elected Emmerson Mnangagwa, there is concern that that could lead to a slew of South African job losses due to Zimbabwe's lower minimum wage and high expectations for a turn-around there now that the disastrous economic policies of Robert Mugabe have ended.
There is no question that the South African fashion industry is brimming with talent, opportunity and ambitious individuals. It is also creating an aesthetic as unique as the country in which it operates — one that local fast-fashion brands should cultivate in the same way independent designers have. But in order for it to flourish both at home and abroad, the government urgently needs to smooth the way for local apparel manufacturing, giving the country a strong, sustainable — and job-filled — fashion industry.
"Whenever there is a major success story in the retail industry internationally, the government has been behind it, adjusting what they spend on mechanisation, business intelligence and data, and working out who to trade with," says Hillard. "So, how can we not be positive, when these are all things Ramaphosa specialises in?"
In South Africa, More Evolution Than Revolution