×

We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now
Paul Simon. Picture: SUPPLIED
Paul Simon. Picture: SUPPLIED

Serial entrepreneur Paul Simon, founder of YDE — which is now owned by Truworths — and Arie Fabian, previously of the Fabiani chain  have partnered with Old Mutual Property to create a new retail store concept called We Are EGG.

The 3,000m² space for small businesses, artists and designers in Cape Town’s Cavendish mall is set to be followed by another in 2022 at The Zone in Rosebank. The concept is aimed at small clothing, food, beauty and design businesses that would never qualify for a mall lease on their own. We Are EGG charges rent and commission but provides lease flexibility, retail software, store staff and shopfittings.

Old Mutual Property owns half of the business, as mall vacancies and reduced footfall during the pandemic have forced property companies to innovate.

You sold YDE to Truworths more than a decade ago. Why are you getting back into retail now? 

Both myself and my partner Arie have retail in our blood. 

When I looked at the mall environment, I found it was really ubiquitous. It was just the same offering. It doesn’t matter how many centres we visited, all of them had the same type of offering. The mall environment lacked creativity and innovators and, in particular, small and medium enterprises had been excluded.

Onerous leases create barriers to entry, stopping creatives from entering the mall space. The reason we went back into retail was to give smaller brands access to mainstream retail.

Why isn’t mall space open to small entrepreneurs?

I think that the property environment before the pandemic wasn’t open to it. After Covid-19, landlords are saying maybe we need to relook at our business model. Also, I think there was quite often an acrimonious relationship between landlords and tenants. And I believe that’s changed for the positive due to Covid-19. 

Retail partnering with landlords is the future. You’re going to see more and more deals of this nature.

How does your concept work? Old Mutual Property owns half the business. 

Old Mutual have been incredible partners to us. They effectively backed two maverick entrepreneurs through an exceptionally challenging first year. They own 50% equity in EGG, which is unique. The landlord has literally partnered with tenants.

Their saying behind the partnership was that we would be the operators to bring local brands and small businesses into malls and in turn allow them to support small business. 

E-commerce is growing exponentially in SA. Is brick and mortar worth investing in?

One thing that we’ve heard time and time again is that e-commerce is cannibalising the market and brick and mortar retail is dead or dying. I disagree. The data shows that e-commerce works optimally alongside brick and mortar stores.

Yuppie Chef is a prime example of a retailer that was purely an e-commerce platform and has now gone into brick and mortar retailing. What will continue to drive the growth of e-commerce is the in-store experience. Even Amazon has opened their own retail stores. 

What kind of assistance do you give those who showcase in your stores?

We call ourselves a platform and retail solution for small and medium enterprises. We supply the shop, the hangers, the shopping bag, the staff and software. This is something I learnt from YDE. We allow the brands to do what they are good at: which is really creating amazing products.

Every store has a full warehouse so we are able to both store their merchandise and fulfil e-commerce orders on their behalf.  We also have software because people are often under the misconception that retail is just about beautiful products and beautiful shop fittings. 

It’s actually a lot more boring than that. Retail is about data. It’s about having the right product in the right place at the right time. 

What does the need to get data right mean? 

What we’ve done is develop software where our partners or vendors are able to log on and see exactly what is selling and replenish or remove stock. 

If you don’t have the right product at the right time, it doesn’t matter what else you do correctly, you’re unable to operate in a retail environment. And for that you require data.

SA consumers are constrained. How do you expand in retail now? 

There’s no question that it’s a tough environment. I’ve been in business for over 30 years and I would go so far as to say that 2021 was one of my most challenging years. But again, I think that there is still sufficient money in the economy, if one has the right offering. It’s absolutely imperative that retailers give the consumer what they want.

What is the future of retail? 

I believe retail is going to come back even stronger than pre-Covid-19 times. Why? Because of basic human nature. People want to touch and interact.

If retailers continue to have the same offering year after year, and just keep their stores the same, then yes, they may die. The future of retailing is to create an experience for the consumer.

childk@businesslive.co.za

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.