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The City Of Leisure That Brought No Pleasure

When Sola Owoloja expanded his business to Cape Town, things went south in more ways than one.

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A hasty expansion to South Africa’s most popular tourist destination brought about some of the early business challenges entrepreneur Sola Owoloja had to face. After a successful launch of a concierge business, West Chauffeurs, in Johannesburg in 2008, opportunities for expansion to various cities in South Africa soon presented themselves to the company.

West Chauffeurs, based in Johannesburg’s swanky suburb of Sandton, was ready for business in Cape Town. In 2009, it secured the highly sought after travel desk contract to provide full concierge services to the African Pride 15 On Orange Hotel and African Pride Crystal Towers Hotel and Spa. It would offer concierge services from booking spur of the moment transportation, dinner reservations, impossible to book theater tickets, finding presents in a hurry and doing deliveries among many other things to guests of the prestigious hotels.

But it was a hasty expansion and move to South Africa’s international tourist city of Cape Town that turned Owoloja’s world upside down, ushering in his worst day.

“The Cape Town operations were not profitable and we didn’t see the possibility of that trend changing for the better,” says Owoloja.

Nigerian-born Owoloja, started his entrepreneurial endeavours in his early twenties in Lagos. It was here that he learned that there is no structure in doing business, even having a 20-hour working day becomes the norm.

He moved to South Africa with the hope of receiving a contract to run an oil services company, but that did not go well. He moved back home, but later returned to South Africa to complete his studies in business administration.

During his studies, Owoloja established the concierge business with little entrepreneurial experience.

It started off with only two luxury vehicles in May 2009, but soon added another five through financial assistance from the National Empowerment Fund. West Chauffeurs was doing well, servicing clients through a global luxury lifestyle company, Quintessentially. They’re known to have very high net worth clients who travel around the world and often stay at the best hotels. And they trusted West Chauffeurs with their clients, Owoloja says.

The empowerment fund and the vehicles West Chauffeurs had purchased bore fruit which helped the business make more than R1 million ($96,000) after only two years in the concierge industry.

They bought new cars for the expansion and even got into lease agreements to finance the rest of the cars to meet the requirements of their contracts in Cape Town.

“We hoped that the expansion to Cape Town would afford us the opportunity to scale the business and as a result be able to increase revenue and profits,” Owoloja says.

But they had entered into unfamiliar territory, an international tourist city that already had well established hotels and services. West Chauffeurs struggled to find its place in the market, and because it relied heavily on the hotel’s guests for business, the company experienced relatively low sales as the hotels were new and in the process of growing their own client base.

“For a small company, expansion should be managed very carefully. We were profitable in our first year, but we did not think that move carefully. We expanded very quickly without the structures to manage the expansion in terms of cash flow, record keeping, etc,” says Owoloja.

The revenue from the Cape Town branch was very low in comparison to the cost of running it. At the end of every month, West Chauffeurs was short by about 65% which they had to source from the profit made during the previous year.

“It dried up very quickly. We tried to get overdrafts to pay salaries, but it was quite difficult. We picked up heavy losses in Cape Town, but those are lessons learned. They were painful,” he adds with a chuckle reminiscent of the tough times.

“It was a very difficult time for me and as a matter of fact, all of us, including employees. I reckon it is so much more difficult to run a business that doesn’t make profits than one that is profitable.”

West Chauffeurs lost millions. Their biggest mistake, Owoloja says, was for the company to go without management accounts and financial statements for nearly a year.

“With the benefit of hindsight, negotiating better terms with our clients could have saved us the considerable losses we incurred in Cape Town,” he says.

But that’s all in the past now. In early 2011, West Chauffeurs packed up office in Cape Town after 16 loss-making months to focus on the business in Johannesburg.

“We decided to focus on our Johannesburg operations which were profitable. It remains profitable and we plan to make it more effective and hopefully be able to make a little more money without additional investments,” he says.

They relocated from Sandton to the affluent suburb of Melrose Arch to run African Pride Melrose Arch Hotel’s travel desk. It is one of Johannesburg’s trendiest hotels. The guests of the hotel are typically discerning travelers who are accustomed to world class services and that became an opportunity for the company to recover from the Cape Town setbacks and also further its growth prospects.

From then onwards, things started to look up.

“We went from nothing to quite a bit. There’s this very nice feeling that comes with making things work,” says Owoloja.

West Chauffeurs currently has 17 employees including drivers and consultants.

Their client base includes companies who use their services for visiting dignitaries. They include Commonwealth Bank of Australia, First Bank of Nigeria, Liberty Life, Musa Capital, Openwave, Union Bank, clients from Barclays and many other private patrons.

Now that Nigeria has bragging rights as Africa’s largest economy, after overtaking South Africa following the West African country’s rebasing of the gross domestic product data after 24 years, West Chauffeurs’ expansion plans can be accelerated.

“Many doors have been opened especially in the hospitality industry as a spin-off from our hard work and dedicated approach to tasks we were entrusted with. In the not too distant future, we will be partnering with an international hotel group on their expansion efforts into Africa, starting with Nigeria,” says Owoloja.

This time, he’ll be armed with the lessons learned from Cape Town.

Entrepreneurs

From The Arab World To Africa

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Sheikha Hend Faisal Al Qassimi; image supplied

In this exclusive interview with FORBES AFRICA, successful Dubai-based Emirati businesswoman, author and artist, Sheikha Hend Faisal Al Qassimi, shares some interesting insights on fashion, the future, and feminism in a shared world.

Sheikha Hend Faisal Al Qassimi wears many hats, as an artist, architect, author, entrepreneur and philanthropist based in the United Arab Emirates (UAE). She currently serves as the CEO of Paris London New York Events & Publishing (PLNY), that includes a magazine and a fashion house.

She runs Velvet Magazine, a luxury lifestyle publication in the Gulf founded in 2010 that showcases the diversity of the region home to several nationalities from around the world.

In this recent FORBES AFRICA interview, Hend, as she would want us to call her, speaks about the future of publishing, investing in intelligent content, and learning to be a part of the disruption around you.

As an entrepreneur too and the designer behind House of Hend, a luxury ready-to-wear line that showcases exquisite abayas, evening gowns and contemporary wear, her designs have been showcased in fashion shows across the world.

The Middle East is known for retail, but not typically, as a fashion hub in the same league as Paris, New York or Milan. Yet, she has changed the narrative of fashion in the region. “I have approached the world of fashion with what the customer wants,” says Hend. In this interview, she also extols African fashion talent and dwells on her own sartorial plans for the African continent.

In September, in Downtown Dubai, she is scheduled to open The Flower Café. Also an artist using creative expression meaningfully, she says it’s important to be “a role model of realism”.

She is also the author of The Black Book of Arabia, described as a collection of true stories from the Arab community offering a real glimpse into the lives of men and women across the Gulf Cooperation Council region.

In this interview, she also expounds on her home, Sharjah, one of the seven emirates in the UAE and the region’s educational hub. “A number of successful entrepreneurs have started in this culturally-rich emirate that’s home to 30 museums,” she concludes. 

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Kim Kardashian West Is Worth $900 Million After Agreeing To Sell A Stake In Her Cosmetics Firm To Coty

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In what will be the second major Kardashian cashout in a year, Kim Kardashian West is selling a 20% stake in her cosmetics company KKW Beauty to beauty giant Coty COTY for $200 million. The deal—announced today—values KKW Beauty at $1 billion, making Kardashian West worth about $900 million, according to Forbes’estimates.

The acquisition, which is set to close in early 2021, will leave Kardashian West the majority owner of KKW Beauty, with an estimated 72% stake in the company, which is known for its color cosmetics like contouring creams and highlighters. Forbes estimates that her mother, Kris Jenner, owns 8% of the business. (Neither Kardashian West nor Kris Jenner have responded to a request for comment about their stakes.) According to Coty, she’ll remain responsible for creative efforts while Coty will focus on expanding product development outside the realm of color cosmetics.

Earlier this year, Kardashian West’s half-sister, Kylie Jenner, also inked a big deal with Coty, when she sold it 51% of her Kylie Cosmetics at a valuation of $1.2 billion. The deal left Jenner with a net worth of just under $900 million. Both Kylie Cosmetics and KKW Beauty are among a number of brands, including Anastasia Beverly Hills, Huda Beauty and Glossier, that have received sky-high valuations thanks to their social-media-friendly marketing. 

“Kim is a true modern-day global icon,” said Coty chairman and CEO Peter Harf in a statement. “This influence, combined with Coty’s leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands.”

The deal comes just days after Seed Beauty, which develops, manufactures and ships both KKW Beauty and Kylie Cosmetics, won a temporary injunction against KKW Beauty, hoping to prevent it from sharing trade secrets with Coty, which also owns brands like CoverGirl, Sally Hansen and Rimmel. On June 19, Seed filed a lawsuit against KKW Beauty seeking protection of its trade secrets ahead of an expected deal between Coty and KKW Beauty. The temporary order, granted on June 26, lasts until August 21 and forbids KKW Beauty from disclosing details related to the Seed-KKW relationship, including “the terms of those agreements, information about license use, marketing obligations, product launch and distribution, revenue sharing, intellectual property ownership, specifications, ingredients, formulas, plans and other information about Seed products.”

Coty has struggled in recent years, with Wall Street insisting it routinely overpays for acquisitions and has failed to keep up with contemporary beauty trends. The coronavirus pandemic has also hit the 116-year-old company hard. Since the beginning of the year, Coty’s stock price has fallen nearly 60%. The company, which had $8.6 billion in revenues in the year through June 2019, now sports a $3.3 billion market capitalization. By striking deals with companies like KKW Beauty and Kylie Cosmetics, Coty is hoping to refresh its image and appeal to younger consumers.

Kardashian West founded KKW Beauty in 2017, after successfully collaborating with Kylie Cosmetics on a set of lip kits. Like her half-sister, Kardashian West first launched online only, but later moved into Ulta stores in October 2019, helping her generate estimated revenues of $100 million last year. KKW Beauty is one of several business ventures for Kardashian West: She continues to appear on her family’s reality show, Keeping Up with the Kardashians, sells her own line of shapewear called Skims and promotes her mobile game, Kim Kardashian Hollywood. Her husband, Kanye West, recently announced a deal to sell a line of his Yeezy apparel in Gap stores.

“This is fun for me. Now I’m coming up with Kimojis and the app and all these other ideas,” Kardashian West told Forbesof her various business ventures in 2016. “I don’t see myself stopping.”

Madeline Berg, Forbes Staff, Hollywood & Entertainment

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Entrepreneurs

Covid-19: Restaurants, Beauty Salons, Cinemas Among Businesses That Will Operate Again In South Africa As Ramaphosa Announces Eased Lockdown Restrictions

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South Africa’s President Cyril Ramaphosa addressed the nation announcing that the government will further ease the country’s lockdown restrictions.

Restaurants, beauty salons, cinemas are among the businesses that will be allowed to operate again in South Africa.

The country is still on lockdown ‘Level 3’ of the government’s “risk adjusted strategy”.

President Ramaphosa also spoke on the gender based violence in the country.

“It is with the heaviest of hearts that I stand before the women and the girls of South Africa this evening to talk about another pandemic that is raging in our country. The killing of women and children by the men of our country. As a man, as a husband, and as a father to daughters, I am appalled at what is no less than a war that is being waged against the women and the children of our country,” says Ramaphosa.

Watch below:

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