Publications
Partners
FASHION HOUSE is a fourth generation family business now in its 76th year of operation.
Adapting to changing market conditions and seizing opportunities when they present themselves have been key to the business' longevity, according to Abu Bakr Cassim, one of the family members.
"The business model has evolved over time, but our values remain steadfast. We've also remained client centric, partnering with our clients along their journey."
Cassim is a fourth generation member of the family business. His focus has been on marketing the business, particularly in the digital space. He told Fin24 more about the business and its history.
How did the business start?
Fashion House was established by Mahmood Cassim, on March 7 1940. It began life as a clothing retailer and gravitated towards textiles over time.
It wasn't until the 1970s, under the leadership of Mahmood's son, Abuh Bakhar, that the business transitioned in to wholesale trade.
Moving up the value chain in any industry requires an appetite for risk and capital. The move was fortunately made easier through the support of manufacturers who believed in Abuh Bakhar.
What does the business do?
Fashion House is a textile distributor based in Newlands, Johannesburg. The core product offerings include shirt and dress fabric such as cottons, linens and satins.
These fabrics are sold on a wholesale basis to clients that include retailers, manufactures and other wholesalers across the Southern Africa region. Trade coverage and support includes Namibia, Botswana, Swaziland, Lesotho and all of South Africa.
What were the challenges for the business?
There have been many challenges that we have faced over the years. Perhaps the biggest challenge faced from a business perspective was adapting to globalisation as the General Agreement on Tariffs and Trade (GATT) was being implemented and import duties were reduced.
Asian manufacturers were able to offer products at deep discounts to locally manufactured goods. This prompted a change in strategy, we now source the majority of our goods from Asia through an agent.
This change in dynamic has resulted in another challenge, the continuing depreciation of the rand. As the rand depreciates, so the cost of our goods goes up. These increased costs have put pressure on our margins and resulted in a number of players exiting the sector.
From an inter-personal perspective, each generational transitional brings another set of challenges. Finding a balance between change and momentum is key to the success.
There are always fresh ideas with every generation, these ideas have been nurtured and explored in our family business.
What are the successes?
The purpose of any family business is to support the family for multiple generations. Our business continues to provide financial support to the extended family and employs five family members, as well as a small complement of staff who are considered part of the family.
We've diversified our client base over time and the majority of our clients have remained loyal over the years.
How do you compete in the tough clothing industry?
The global textile industry has seen a shift in recent decades. Asia has become the manufacturing hub with pockets of manufacturing in markets like South Africa.
Fashion House is entrenched in to the local industry. With an operating history of more than 75 years we are established with reliable suppliers and a strong distribution network. This has allowed us to monitor international trends and weather countless business cycles.
We've also managed our cost base conservatively over time. A phenomenon present in most family businesses is the conservative management of debt.
This typically results in family businesses underperforming others during market upturns, but outperforming them in lean times and through the complete cycle.
We've also found our niche within the textile market. We understand customer behaviour patterns and needs. We use this knowledge alongside business processes to efficiently run our business.
Furthermore, we explore opportunities outside our niche as they present themselves to ensure we do not stagnate.
What are the future plans?
We've tried our hand at manufacturing in recent years. Its something that we'd like to continue exploring over the coming years.
We've learnt from our first few experiments and will apply lessons to future projects. We are also working on broadening our reach in to Africa.
Manufactured, complete products will give us another line to offer in these markets. This will also provide a hedge against the depreciating Rand.
Government support for manufacturers and current exchange rate levels make this a promising joint strategy.
