Date: 2004/06/18
Fifteen years ago, Marcel Joubert was selling T-shirts at Greenmarket
Square in Cape Town. His flea market venture germinated into retail clothing group Platinum Holdings, which has a turnover of about R200m per year. As a private company Platinum does not reveal profit figures.
With his partner, Moira O'Reilly, Joubert built Platinum through successive acquisitions. Using their savings and later the company's balance sheet, Joubert and O'Reilly bought popular brands Hilton Weiner, Jenni Button and Aca Joe at what many would consider bargain basement prices.
Platinum owns about 60 stores countrywide, including Vertigo, the brand that launched the group. All the brands are performing well though Vertigo, relaunched in the past three years, is "not as optimised" as the other brands, Joubert says.
Though retrenchments and closures are the norm in SA's clothing industry, Platinum is optimistic about its future. A combination of solid business acumen, a partnership that works and a passion for the business has made the Platinum duo determined to improve margins and quality.
Like French designer Yves St Laurent and his partner, Pierre Berge, Joubert and O'Reilly have design sense and financial and management prowess, a lack of which has been the undoing of many local designers, including Weiner and Button.
Recently SA Clothing & Textile Workers' Union's general secretary Ebrahim Patel hailed Platinum as an SA success story. Platinum's success could serve as an inspiring model for other emerging retailers and manufacturers, Patel said. The union is discussing Platinum's participation in the Buy SA campaign.
Joubert recalls the early days in the 1980s when he arrived at Cape Town University to study actuarial science and began selling T-shirts to students to pay for his fees. "I later became one of the first 20 traders at Greenmarket Square and it worked out well, " Joubert says.
Soon he began exploring other markets and revenue margins grew. By this stage Joubert had changed from actuarial science to a BCom degree.
In 1988 he met O'Reilly, who had just completed a BA degree. She had a good eye for design, inherited from her Italian grandparents.
They became partners and opened their first Vertigo store in Rondebosch in 1989, catering to the student market. "Vertigo became a phenomenon," Joubert says. The company built its own factory and started a vertically integrated operation - buying yam and dyeing and designing its clothes. This effort paid off, securing a cash pile of R2m that would serve as the basis for future acquisitions.
In 1995 Platinum bought Hilton Weiner for R750 000 from the Bergers group, which had acquired the chain when Weiner hit rock bottom. "We paid half in cash and the rest over an agreed period," Joubert says.
Ironically, large companies such as Woolworths and Truworths were not interested in buying Hilton Weiner. The prevailing view at the time was that Hilton Weiner could not be rescued.
Hilton Weiner was a great marketing commercial success and achieved almost cult status in the 1980s. Sadly though, it suffered from operational problems and Weiner had to sell the business.
Jenni Button, like Hilton Weiner, had achieved great branding success in the 1980s. Both brands had dominated the landscape of SA's fashion industry before the arrival of popular international labels such as Diesel and Polo.
Button, too, ran into difficulties. She was a great designer and owned a strong brand but lacked management skills. The Board of Executors (BoE) believed in the brand and kept it afloat for a while. Eventually BoE sold it to Joubert and O'Reilly for about R2m. Button is no longer involved in the company.
It was not all plain sailing, Joubert says. "We signed the Hilton Weiner deal in the Christmas week and on Christmas eve Moira and I were rushing from store to store. They were in such bad shape it was depressing," Joubert says.
The turnaround had to be done fast, like a "paramedic rescue". There was not much cash available and rents and overheads had to be paid. Joubert and O'Reilly focused on new product development and positioning.
Basic issues such as improving customer service and creating the right ambience in the stores were central to the turnaround. Hilton Weiner today is a range of urban stores for the younger crowd and classic stores providing a smarter look. The mix has worked well.
Joubert and O'Reilly are concentrating on their existing businesses and have advertised for staff for several key positions.
A further 15 stores are to be opened in Sandton, Clearwater and Woodhill later this year. "If the reaction from our Canal Walk, Gateway, Menlyn and Rosebank stores is anything to go by, this is going to make big waves in the Gauteng market," says Joubert.
A planned takeover of the LA Retail and Oxygen clothing stores did not occur and Platinum is now suing the LA Group for R93,1 million. The case is scheduled to be heard in October.
Shareen Singh
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