When globally-acclaimed fashion brands decide to set up shop in Africa, it is typically Johannesburg’s Sandton City mall they look to. The shopping center located in the city’s affluent Sandton neighborhood has carved a niche for itself in the luxury retail space.
Three years ago, Sandton City opened its “Diamond Walk” wing. The designated area houses mono-brand stores by luxury brands including Giorgio Armani, Gucci, Prada, and Patek Philippe. The opening of an additional dozen high-end flagship stores is scheduled for late 2019.
“We’re seeing double-digit year-over-year growth for luxury brands. The wealthy consumer isn’t affected by global economic recessions – they’re resilient to that,” says Sandton City General Manager Preston Gaddy. He further adds, “For the African tourist, this is the pinnacle of shopping on the continent. Our mall attracts a lot of spenders from oil-rich West African countries such as Nigeria and Ghana. They can buy their wife a Louis Vuitton handbag whilst getting the latest Nike sneakers – all under one roof.”
According to Sandton City management, Louis Vuitton is amongst their most successful luxury tenants, closely followed by the likes of Versace Collection, Burberry, and Cartier. At present, 40% of stores on Diamond Walk are being directly managed by the luxury brands, versus 60% through licensees. Amongst the roughly 300 stores located inside the property owned by South African real estate investment trust Liberty Two Degrees, one will also find mono-brand stores by Hugo Boss, Michael Kors, Zara, and H&M.
“Luxury brands have been hesitant to come to South Africa. Louis Vuitton was amongst the first, and others are now trying to seize the opportunity,” Darren Katz comments. Katz is the Managing Director of Excellerate Brand Management, the company which oversees Sandton City’s branding and strategies. “Diamond Walk brands have managed to keep pricing consistent between global and local – they’re very much similar in price. This allows the South African consumer to spend money in South Africa. The luxury consumer here is typically an under 40, aspirational, up and coming young professional. A brand like Gucci for example really speaks to that market. The same thing applies to a brand like Dolce & Gabbana, which set up a pop-up shop that allowed shoppers to customize their sneakers.”
Currently the Sandton City customer base is largely female, though “the male market is strong when it comes to shoes,” per Excellerate Brand Management’s MD. A further testament to growing trust in Sandton City’s male consumer is Louis Vuitton’s decision to release its men’s ready-to-wear collection in-store, instead of its womenswear range.
As far as data collection goes, the Johannesburg shopping center makes use of facial recognition- and foot counting equipment. This provides Sandton City executives with rich data with regards to the gender, race, and age profile of shoppers, which may subsequently be shared with retailers.
Sandton City management is looking to extend its Diamond Walk offerings due to growing demand. General Manager Preston Gaddy recently returned from a trip to Paris, where he sat around the table with potential stakeholders. “I was in Paris to have a bunch of meetings with French luxury brands. They jokingly told me ‘You need more French amongst all those Italian brands.’” We’ve been in talks for about a year already, and if we are successful in securing them, they’ll open by the end of 2019.”