“My father started Fabiani in 1978 at shop Number 6 St George’s Mall, Cape Town, just up the road from here,” says Arie Fabian, sipping on an espresso as we chat at a bustling Cape Town coffee shop. “This was at a time when our whole economy was very much confined because we were in the heart of apartheid. Fashion wasn’t global back then, so you could only get it in pockets, and we were one of the first importers of great luxury brands in South Africa.”
Arie’s energy and focus suggest that espresso might well course through his veins. He looks razor sharp and lean, indicators of years spent building a brand locally and internationally, and sweating on the shop floor getting to know his clients. After studying at Cape Technikon (where he learnt every aspect of the clothing business, along with further studies in Business Management), Arie set sail for Munich, where he interned with Hugo Boss.
“I was a doer. I wanted to get out there. If a customer walked inside I wanted to serve him. German people are super-efficient and they do it exactly right… but they’re a little bit more reserved, and here was this young enthusiastic guy who was ready every time a customer walked in. I wanted to serve them and show them as much as I could,” recalls Arie. As he speaks his energy and enthusiasm is infectious, even though he was drained of energy from fasting.
He made one memorable sale in Munich when, at the age of 22, Tommy Hilfiger strode into the store looking for samples for his own collection.
“I worked this guy throughout the entire shop. It was a three-floor store and I took him upstairs and down and just sold him as much as I could. At the end of the day I rung up a 40 000 Deutsche Mark sale for Mr Hilfiger. It was just unbelievable but, at the same time, all it took was a lot of effort and 100% service.”
While learning the trade overseas and picking up trends, he kept in contact with his father, continually updating him on his concerns regarding their business model.
“I would tell my father that, even though we’ve got a great brand at the top, being Fabiani, we’re selling all other people’s brands, which means that they are the masters of all—including the master of our destiny.”
It proved to be a pivotal vision for the brand, and one that needed the benefit of seeing the problem from the other side of the fence. Aside from being influenced by currency, there was also the issue of price parity.
“If you’re travelling you know you’ll be paying anything between 30 and 45% duty on your purchases, so what transpired was that I kept on telling my dad that we need to do everything Fabiani. I came back to South Africa, wet behind my ears—but hungry as hell—and what was in my favour was the fact that I loved people and I loved fashion. And then we started doing everything under the Fabiani brand.”
The beauty of this model was that it also allowed them to build the Fabiani brand parallel to the brands that they were selling in their stories—Prada, Armani and Boss.
One of their great success stories was found in one of their first new stores that was, ironically, a small site upstairs in Nelson Mandela Square.
“We traded in a 50-square metre store but, because it was located upstairs, we were trading at 2.5% rental to turnover, which is similar to like an FMCG or a food business,” he gleams. “There’s two important ratios in retail—salaries as a percentage of turnover, and rental as a percentage of turnover. In the luxury space where Fabiani sits, on a normal basis if your turnover is R1 million then your rental would normally be anything between R100 000 to R150 000—around 10% to 15%.”
The company took the lesson from this success and carried on opening small-sized stores that packed a punch at the tills.
Building on success
Typical of the owner-run, family business is the attitude that comes through of the importance of building the business from the ground up.
“Most businesses operate top down, with people filtering information down. As a result, the people running the business don’t have a real understanding of what it’s like to work on the ground. I’ve had the privilege of meeting people of every sort—and sometimes not the privilege,” says Arie, laughing
“People always ask me how I know so many top business people and celebrities, but it’s because I’ve served them in my shops. From the CEO of Investec Bank to the CEO of First Rand, and hundreds of other CEOs. I think when you have that kind of interaction you can create real relationships.”
One relationship that made a significant impact on the brand’s history was when the Foschini Group bought Fabiani in 2011.
“They bought seven stores as well as the brand, and I went with it to drive the brand as a brand director for a five-year term, which ended a few days ago,” he tells me.
“When I left we had opened up 24 Fabiani Stores all over the country, all the way up to the Limpopo… and I personally opened up every single Fabiani Store and trained every single one of our fashion consultants before the store opened.
“It was an unbelievable experience, but I truly believe that success is about being present on the shop floor. If you care for your people then they’re going to care for your customers. If you don’t care for your people then they’re not going to care for the customer. It’s just basic.”
One of his biggest legacies was convincing the group to become a retailer of brands within their triangular business model. Fabiani was their beautiful acquisition at the head of the triangle (“The diamond, as they call it,” he reiterates), with Markham, Foschini, Totalsports, sportscene, American Swiss and Sterns all operating in the middle. At the base of the triangle are brands such as Exact, @Home, Due South, and new fashion brand THE FIX.
“They’ve got 22 brands and they now talk about it as the portfolio of greats. In 2013 I passionately addressed the Board and suggested that they shift from being a credit retailer to being a house of brands.
“Brands have personality, brands have emotions, brands have connections. After all, you connect with the brand, but you don’t connect with the Foschini Group or the Woolworths Group.”
Next up for this young man (in corporate terms) is a global executive MBA which will take him overseas for two-week stints in different countries.
“The one I’m going to has an Asian focus. I want to learn about the Asian culture, because I don’t know it.
“Long-terms what I want to do is connect people and go into their M&A private equity space—that’s where my joint is.”
When you see the determination in Arie’s eyes, you know that this is one space that’s definitely worth watching.