Fendi on sale in shopping centers where African Bling is still king: Retail

  After decades of developing African ostrich leather, diamonds, gold and platinum, handbags, watches and other luxury manufacturers want to send some of these goods back - and the locals are eager to buy.

With oil exports from Angola and Nigeria meet new millionaires and expanding middle class in South Africa and Morocco, Burberry Group Plc (BRBY), Prada SpA (1913), and luxury companies are other openings in African cities to meet the demand of the representation of wealth found.

"The mix of customers is changing," Michele Norsa, said CEO of the Italian shoemaker Salvatore Ferragamo SpA (SFER), in an interview with Bloomberg Television. "You look nationalities of people you would never buy patterns -. Of Angola, Nigeria and Latin American countries"

Burberry opened his first boutique in Johannesburg at the end of last year in which she was in the shop in Cape Town since 2008. Louis Vuitton (TM), Fendi, Gucci, Prada, Miu Miu and others have opportunities in the luxury shopping centers in Casablanca first one opened in December. The Swiss watch manufacturer Breitling Watches sells through distributors in Ghana, Algeria and 10 other African countries.

"There is a new focus on Africa," Italian suitmaker Ermenegildo Zegna Group, stated in April, announced plans for its first stores in Morocco and Nigeria to open.

Even as brands rush to buy in the richest Africans continue their suede sandals $ 750 or $ 4.100 Ferragamo handbags patent leather Vuitton on short trips to Europe or the Middle East. Stores remain important for building brand awareness, even if they do not accumulate a lot of sales.
Esteem accrued

The appreciation gained an expensive Clock to buy in Paris or Dubai "is not for you, unless there is knowledge in the local environment, which means the brand," said Jolyon Ford, an analyst Senior Consultant at Oxford Analytica.

Sixty percent of millionaires in Africa in U.S. dollars or 71,000 people in South Africa, the largest economy in the region, according to consultants Bain & Co., more millionaires than Saudi Arabia or the Emirates Arab Emirates, the consultant estimates.

Sales of luxury goods in Africa, the Middle East and in Australia may increase up to 8 percent per year 2011-2014, according to Bain, faster than any other region except Asia.

But realize also the suppliers of diamond studded pens and leather jackets $ 3,500, they need to create a clientele that goes beyond the super-rich if they win in the region want to be successful.
New middle class

"The real opportunity is the emergence of new middle class," says Claudia D'Arpizio, a partner at Bain's leading luxury products consulting practice.

In 2020 420.000 South African households have a disposable income, which overcomes $ 100,000, Bain says. To the resale value of luxury goods in the country where the World Bank says nearly a quarter of the population live below the poverty line, will be sold to swell by 20 percent to 816 million per year by 2015, estimates € Monitor International. For at least five years, companies in which the expansion of the few stores to test the market and evaluate the local taste limit, said D'Arpizio.

As the African market is developing, Burberry will look "absolutely" to expand in the region, said Chief Executive Angela Ahrendts May "The teams are constantly reviewing the market on the rise and as a partner is available."
Bling King

In Morocco, "it shows too much about the label, while in developed markets, it is, if anything, the opposite," said Fflur Roberts, global head of luxury goods research € monitor. In large parts of Africa, "Bling's still king." Private consumption is set to rise over 54 percent of 2011-2020 in the country, according to Euro monitor.

The infrastructure is the biggest obstacle for the industry, according to Ford Oxford Analytica. Nigeria is the second highest gain of the total volume of champagne leak in France 2011-2016, estimates € headed monitor. But with four times as many people as Johannesburg, Lagos, only a handful of shopping centers has during the South African city has scores.

Companies should assess the risk of expanding their reputation in parts of the continent. Fueled by oil exports to China, Angola is "The Crucible" of conspicuous consumption in Africa, but according to Ford, is the wealth in few hands, and a quarter of the gross revenue of the country is not recognized, Ford estimates.

Angola, he said, "is like a laboratory" for the acute income inequality. "So far it has not led to social unrest, or at least while targeting shops, but it is certainly" a possibility.