The road linking Five Cowrie Creek with the Atlantic Ocean in Nigeria’s biggest city is a study in contrasts. Policemen harangue motorists and street tailors clank their scissors to hustle for business amid sleek glass office blocks, a Porsche dealership, and now, an Ermenegildo Zegna clothing shop.
“You see someone driving past in a smart car and then reversing to check if our sign is authentic,” says Tope Edu, owner of the franchise store, which opened in Lagos’s financial district of Victoria Island in late April. “Then they come inside and say, ‘Oh, it’s just like in Europe’.”
The Zegna outlet, which sells suits for between 320,000 and 450,000 naira ($2,000-$2,800), is the first to be opened in Nigeria by any luxury fashion house. It is also the first step taken by the Italian family-owned group into sub-Saharan Africa, which Gildo Zegna, chief executive, believes could become “a kind of new frontier for luxury”.
Numerous countries on the continent have fast-expanding economies, especially the commodity producers, such as Nigeria, Africa’s biggest oil producer.
While the benefits of growth may not be spreading to all classes of society, the number of super-wealthy people is on the rise, forcing luxury goods companies to consider expanding into countries they have long ignored.
Mr Zegna says sales to the 2,000 Africans who regularly shop at the company’s stores worldwide have grown by a “high double-digit” percentage over the past 12 months. On average, the African consumers spend 50 per cent more than the typical shopper.
“They are serious buyers,” Mr Zegna says. “We are in a very upper luxury [market].”
Until now, direct interest from the world’s elite brands has been largely confined to the top and tail of Africa. Zegna, one of the largest men’s luxury goods groups, with sales of €1.2bn in 2012, has stores in Cairo and Casablanca. By 2015, it plans to have opened shops in Cape Town and Johannesburg, where the likes of Louis Vuitton and Burberry already have a presence.
But Zegna’s decision to expand into the middle of the continent suggests that the luxury retail map of Africa may have to be redrawn.
Following the opening in Lagos, which has resulted in “pleasing” sales so far, the company plans to open stores in Angola and Mozambique in 2014, “although bureaucracy could delay it”, Mr Zegna says.
The time and effort that went into opening the Lagos store may indicate why other brands have not yet rushed in. Mrs Edu, an interior designer, first approached Mr Zegna at a luxury conference seven years ago, suggesting he open a shop in Lagos.
The Milan-based company had already noticed heavy spending by Nigerians and Angolans at its stores in London and Lisbon, in particular, and also in Paris, Madrid and Milan. But it wanted more data on the potential market in Nigeria. So Mrs Edu organised a series of made-to-measure events in Lagos, with Zegna tailors flying in with their fabric. The results were encouraging.
“There is this myth that wealthy Nigerians only want to spend money outside Nigeria,” says Mrs Edu. “That is only because there is little for them to spend it on here.”
Zegna executives then flew out to Lagos to search for a site. They visited a few of the malls that have sprung up in recent years but decided that none was classy enough. A plan to lease a shop inside the new InterContinental hotel on Victoria Island was scrapped when the hotel opening was delayed. Finally, they decided to design a standalone store on Akin Adesola Street, which Mrs Edu hopes may become the city’s first high-end shopping area.
Prices are benchmarked at roughly 10 per cent above those at the store in New Bond Street in London. The most exclusive products have proved popular, including crocodile skin loafers, which sell for 398,000 naira, Mrs Edu says.
In their shopping choices, African customers were less like the Chinese, who quickly embraced the company’s sportswear line, and more like the Russians, Mr Zegna says.
“It’s the men who are the big shoppers. They want the top [quality] and are very formal . . . You have to sell to the world, so they need to look like the world traveller.”
Zegna has a history of taking a punt on frontier markets, moving into China 20 years ago, ahead of its competitors. It is now the biggest seller of luxury menswear there. Mr Zegna is betting on the similar success in Africa.
“This is a big, big sign of hope at a moment when there is not much hope around. It’s a bit like the China dream in the early ’90s or the Russians in the late ’90s or Mexico in the 2000s. We do hope . . . that the first settler there will be blessed.”
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