Success in Retailing - South AfricaBY PHIL IP KRAWITZ

EXECUTI VE CHA IRMAN, CA PE UNI ON MA RT GROUP

BARCLAYS SOUTH AFRICAN RETAIL CONFERENCE : 7 OCTOBER 2014

Outline

• Defining success

• What drives us

• Our story

• Our keys to success

• The changing environment

• The future outlook

Defining Success

• “Success is getting what you want – happiness is wanting what you get.” – Harvard

• “Define success on your own terms, achieve it by your own rules, and build a life you’re proud to live.” – Anne Sweeney

• “Stop chasing the money and start chasing the passion.” – Tony Hsieh

• “Success isn’t about how much money you make. It’s about the difference you make in people’s lives.” – Michelle Obama

What Drives Us

People philosophy

• “The quality of the company is equal to the quality of its people”.

• If we can attract, train, care for, retain and inspire better people than the opposition, we win!

• The deal:- You will be employed by us for as long as you continue to add value to this company. In return, we will give you: o Fair remuneration

o The tools to do your job

o Meaningful and important work; and

o The training necessary to make you employable here or elsewhere

What Drives UsMarketing philosophy

“Marketing is the profitable creation of consumer satisfying goods and services”.

Our Mantra!

18861933

19451946

19481962

19721981

19841990

20002005

20082011

TODAY2016

P. Krawitz and Co. founded by

grandfather, Philip Krawitz, in

Johannesburg

Moves to Cape Town – renamed Cape Union Mart

First store opens cnr Corporation and Mostert St.

Arthur Krawitz

takes over

First import permit

Acquires own property

from Woolworths

Philip Krawitz (Jnr)

joins as student staff

Arthur has a heart attack and

Philip leaves University to run

the company

Philip completes Advanced

Management Programme at

Graduate School of Business

18 Cape Union Mart

stores

50 Cape Union Mart

stores

First Old Khaki store

André Labuschaigne

joins the company as

CEO

K-Way Factory

bought from Hepworths

Second store opens in

Sanlam Centre, Parow

79 Cape Union Mart stores, 48 Old Khaki stores,

23 Poetry stores

180 stores planned

200 stores strategy

Our Story

First Poetry store

Our Keys to SuccessOur People • Treat your business like a business, and your

family like a family!

• It’s all about the passion! Im tirtzu, ein zoaggada!

• Employ people who are much smarter than you.

• Get ordinary people to do extra-ordinary things.

• The mark of an exceptional company is how it treats the exceptions in its company.

• Create constructive conflict.

• Accept responsibility for taking people from where they are, to where they can be!

• Pay as much as possible!

Our Keys to SuccessOur customers• Find out what they want

• Create it or obtain it

• At a profit for ourselves

• Make sure it satisfies

• Excite the customer

• “You didn’t have to do that”

• Cherish the children

• The 5 Way guarantee

o Price Match

o Cash Refund

o Price protection for sales

o We guarantee fair wear and tear

o Accept all credit cards 7 offer bank exchange rates

Our Keys to Success

Our vendors• View them as partners

• Think long term

• Tough but fair

• Punctual payment policy

• Try and let them grow with you

• Protect your supply line

Our Keys to Success

Corporate citizenry• Embrace the Environment

• Go beyond consumer legislation

• Remember you are simply a tool for the achievement of societal goals

• If you are expecting dividends from society, make investments

o Training

o Capital Equipment

o CSI

o Use your resources, experience, connections and capacity to change the world from what it is, to what it can be!

The Changing EnvironmentThe new South Africa

• Respect for all people

• Race plays no part

• Gender discrimination is out

• The Irish coffee theory goes

• Demographic revolution

o Black middle class goes from 1.,7 million in 2004 to 5.4 million this year

o White middle class goes from 2.8 million in 2004 to 3 million this year

o High earning blacks (earning more than the average white) go from 120,000 in 2001 to 1.9 million this year

o 60% of Government spending goes on social services (health, education and protection)

o Tax payers earning above R750,000 will pay more than 30% of all income tax collected while earning about 24% of personal incomes

• Better educated

• Globally aware

• Quality conscious but value driven

The Changing EnvironmentThe internet revolution

“The decision on what to buy and who to buy it from will be made before the customer leaves to go shopping”

The Changing EnvironmentThe crisis of supply

• “South Africa will face a crisis of supply rather than a crisis of demand”.

• Re-shoring will dominate the economic landscape.

• Customers will subscribe to “local is lekker”.

• Local manufacture will revolutionize lead times and customization.

Our K-Way Factory

The Changing Environment

500,000

35,000

2005

2014

150

200

The Future Outlook• Don’t write off Africa.

• A better educated population will offer a lucrative marketing opportunity.

• The middle-class will increase dramatically together with a very attractive “black diamond” market.

• Global competition will sort out the men from the boys.

• Tony Leon got it right –“From 1948 until 1994 the Nationalist Party did everything in its power to bugger up this country. It failed! Since 1994, the ANC has been in power, they too are doing everything possible to bugger up this country! They too will fail!”

Thank you for listening

The End