It’s a few months before the 2010 FIFA World Cup. Experts predict 300,000 tourists will come to South Africa with bulging pockets. Businessmen across the country are rubbing their hands. Musa Xaba, founder of clothing store Democratic Republic, was caught up in football fever. When someone approached him with the idea to open a bigger store at the V&A Waterfront in Cape Town he thought it was a good idea. You know what thought did…
Xaba was on a steady course with his five-year plan. The Democratic Republic store at the Waterfront was doing well, Xaba was opening another store at Cape Quarter Mall and investors were eager to expand overseas. A second bigger store at the Waterfront was not in his plan but the opportunity seemed too good to pass up.
“All the marketing gurus of the world were telling us that South Africa would be a different place… the World Cup was going to open doors to different people who had never been to Africa,” he says.
His rationale was that the existing store was very small. The thought of customers complaining because of a cramped shop was too much to bear.
But the World Cup came and went. The hundreds of thousands of supporters came, saw and walked away—taking their money with them.
“It became a disaster beyond disaster. The people who came were young and very into soccer. They hadn’t come to shop; they had come for the experience of the soccer World Cup,” says Xaba.
To make matters worse Democratic Republic’s regular customers left Cape Town to avoid the soccer crowds.
“This is the interesting thing—70 percent of all the five-star hotels in Cape Town were pre-booked but the people never came. The stadiums were chockablock full, hotels were empty. Your Pick ‘n Pays and backpackers were full. The high-end consumers that they promised didn’t come through,” he says.
Xaba had no choice but to close the two stores at the Waterfront, losing R2 million ($261,200) in the process. And as if things couldn’t get worse, his foreign investors pulled out. Xaba was devastated. It was hard to believe that one bad decision would destroy years of hard work.
“We had to let go. I told my staff that we were going to focus and stick to the plan. We had a road map. We said after five years in Cape Town we should be in the right season to move to Johannesburg.”
With thousands of rands worth of clothing and one store remaining at Cape Quarter, Xaba began to recover slowly.
It has been almost three years since the soccer World Cup and Xaba has made the move to Johannesburg. The business has stabilized and the lesson has been learnt.
“In retail, it’s about time. Even to come to Jo’burg we had to wait out five years in Cape Town.”
Xaba has even thought of reopening a store at the Waterfront, a place where he enjoyed luck as well as disaster.
In 2008, Céline Dion was on tour in South Africa. On the day she visited the Waterfront she only walked into two stores: Louis Vuitton, where she bought a bag; and Democratic Republic, where she left with 17 items of clothing.
“The clothes were just so many and she needed them to be sent to the hotel. I don’t think that record has been broken,” says Xaba.
Looking back, Xaba admits that the road to becoming an entrepreneur has been filled with dedication and determination to learn the industry inside out. After graduating from Natal Technikon—now Durban University of Technology, where he studied design—he worked at South Africa’s biggest listed apparel retailer Truworths, as a senior buyer.
In 2000, he started his own manufacturing company, Vintage Culture, which produced clothing for companies such as Topics, Hilton Weiner and Truworths.
“When I was working as a buyer, I traveled overseas to source products in America, the United Kingdom, Amsterdam, Paris and Milan. But when I started working for myself I had to start from the bottom. That meant I was staying at backpackers. I had to organize cheaper [flight] tickets—it meant traveling through Dubai to get to London,” he says.
After five years in manufacturing, Xaba took the plunge and opened Democratic Republic.
“I was looking for a name… that wherever you are [in the world] you could look up at the name you’ll know it is an African brand. We wanted to build a company that would produce a product for a youthful South African woman… She is ageless, she can move with the trends, she knows what she wants,” he says.
Democratic Republic made its debut at YDE (Young Designers Emporium), which sells clothing by South African designers, in 2005.
“It was the easiest way. I didn’t borrow money from the bank. I had to sell everything that was sellable in terms of my assets in order to raise the finances.”
But after two months the agreement fell through. Xaba wanted the brand to stand out but YDE wanted the clothing to blend in with everything else. So he decided that the only way forward was to stand alone and he opened his first store at the Waterfront.
Looking back he admits that there were hard lessons learnt but that the most important was knowing that there are certain things in life you cannot control, and the outcome of the World Cup was one of them.
“Don’t put the cart before the horse—that’s my 2010 lesson.”
Now, as Xaba sits sipping on a glass of chardonnay, there are few signs of stress. He spends his time flying between Johannesburg and Cape Town to keep an eye on the stores. As the 2014 FIFA World Cup approaches, Xaba is playing it as cool as his chardonnay. He has a five-year plan and he’s sticking to it this time. In footballing terms, he conceded two own goals after spending money on a star defender that turned out not to be so. At the very least, his business won in penalties at the end of extra time.