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Keep Your Eyes On Kenya

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While watching the CCTV footage of the Westgate attack in a

Nairobi, it is impossible to remain fixated and stare unblinking at the screen. How can we not look away when confronted with images of terrorists casually taking aim at civilian shoppers cowering in supermarket aisles.

It still seems impossible to fathom that the killers struck on a Saturday afternoon. A time for families, when parents pushed strollers and hauled groceries into shopping carts—trolleys that would be used hours later to evacuate the wounded and return the dead.

The sense of disbelief grew by the hour with the knowledge that a business, and most importantly, people we had invested in, had been caught up in the attack.

Swedfund claimed a 14% share in Deacons, a leading Kenyan retailer which owned four outlets in the mall as sub-anchors, including the popular Mr. Price fashion store that dominated the ground floor. More terrifyingly, the employees were barricaded behind steel shutters praying for salvation and texting what they believed would be their final words to loved ones.

In total, 30 of Deacons’ staff were caught up in the attack. Against the odds, all of them survived. Unlike many of the other store managers, our own had simulated an emergency evacuation in their company training. In short, in a time of incredible adversity and terror, they knew what to do in the most unthinkable of circumstances.

The stories of survival among the Deacons’ team led me back to Kenya to meet them in a time of aftermath and painful reflection for the whole of East Africa.

As a former McKinsey consultant, I arrived in Nairobi accompanied by a throng of media focused more on the economic impact than the human toll of the crisis. Yet this went against everything I believe. With my recent international NGO background, I had come to my new role at Swedfund with the hope of contributing to Africa’s economic revival.

Around 600 million new jobs will be needed worldwide in the next 15 years to absorb a burgeoning youthful workforce, mainly in Asia and sub-Saharan Africa, according to a recent World Bank report.

The private sector will be the engine for this job creation, accounting for 90% of jobs in the developing world, but governments have a vital role to play by ensuring the right conditions are in place.

In our opinion, if you want to achieve inclusive growth you must not only make solid financial investments based on due diligence but, against traditional forms of investing, also improve working conditions, sustainability and solid corporate governance. The reaction of the staff at Deacons in a time of crisis taught us much about we need to know about this investment in people.

Swedfund’s decision to invest in retail represented a vote of faith for the nation’s middle class, whose emergence in key African countries cannot be overlooked. It is key in driving economic, social and political expectations. By 2025, annual consumption in emerging markets is estimated to rise to $30 trillion.

During my visit, it emerged that Deacons had lost up to 15% of its Kenyan business and lost $2 million in the attack. But this, of course, paled into insignificance when compared to the human toll of the attack.

Encountering the young women who had worked in the Mr. Price store, where as many as 40 shoppers had been saved by the quick thinking of the management, I was both troubled and inspired by their resilience. Some of the store workers texted their husbands and begged them to say goodbye to their young children. Others had persistent and violent nightmares. One told me she struggles each day with her own survival, knowing others who had died.

There is never an appropriate time to talk about investing or re-investing in the wake of an incident like Westgate, but for the Kenyan people it is clear that they want this on the agenda immediately. If incidents like the mall attack deter investors it could harm the country in the long term.

One of our roles is to defend investments in difficult places. In my opinion, there is no greater incentive to invest in job creation and youth by backing local businesses in nations prone to terror attacks.

By investing in economically-sound projects, we can achieve a catalytic effect. We can create jobs and help secure the future of youth and prevent their descent into extremism, like the young men who carried out the Westgate assault.

In Sweden, there are progressive firms like H&M and Ericsson looking towards inclusive growth on the continent but there is a need for more multinationals to invest and create jobs. Africa’s greatest strength could be its young and rapidly growing population.

Framed against this youthfulness, the prerequisites for expansion and development in Africa are better than in many other places on earth. According to a McKinsey report, the continent’s consumer-oriented businesses will grow by $400 billion by 2020. The bottom line? An investment in Africa can also be seen as an investment in youth.

What the Westgate attack teaches us is that enabling youth is key, but we also need to join forces. If we can show the way, we can make sure private business join NGOs in a global partnership to help job creation. We cannot look away from Africa like we can the stills on the CCTV screen.

Entrepreneurs

Leaving Airplane Middle Seats Empty Could Cut Coronavirus Risk Almost In Half, A Study Says

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A new research paper from the Massachusetts Institute of Technology estimates that blocking out the middle seat on airplanes could cause the likelihood of passengers being infected with coronavirus to drop by nearly half, just as some airlines are starting to book flights to capacity again.

KEY FACTS

  • According to the MIT paper (which has not been peer reviewed) the chances of catching coronavirus from a nearby passenger on a full airplane when all coach seats are filled is about 1 in 4,300.
  • However, those odds drop to 1 in 7,700 when all the middle seats on board are left empty, the paper states.
  • Taking into account a 1% mortality rate according to the statistical model, the likelihood of dying from a coronavirus case contracted on a plane is far more likely than dying in a plane crash, which has odds of about 1 in 34 million, the paper stated. 
  • In “Covid-19 Risk Among Airline Passengers: Should the Middle Seat Stay Empty?” the author of the study, Arnold Barnett, wrote that his analysis aims to be “a rough approximation” of the risks involved in flying during the coronavirus pandemic.
  • “The airlines are setting their own policies but the airlines and the public should know about the risk implications of their choices,” Barnett told ZDNet this week.
  • The paper comes just as more flight carriers, like American Airlines, begin booking flights to full capacity despite surges of the virus across the country. 

KEY BACKGROUND

The coronavirus pandemic has been disastrous for the travel industry, and has especially hurt airlines. Major American carriers including American, Delta and United have asked employees to take buyouts and early retirement, Forbes reported, in a bid to cut costs as the pandemic causes them to bleed cash. United Airlines warned this week that it could be forced to furlough 36,000 jobs, or nearly half of its American workers, starting in October if travel doesn’t pick up. In April, the airline estimated that in the first quarter it lost $2.1 billion pre-tax, Forbes reported, and was losing $100 million a day in the last half of March. Boeing CEO Dave Calhoun said in May he expects a major airline to go out of business in 2020 as a result of pandemic pressure.

NEWS PEG

American Airlines announced two weeks ago it would begin booking middle seats again starting in July, although the carrier will allow passengers to switch from a full flight without any extra cost, Forbes reported. United is also selling tickets for middle seats. American Airlines took flak earlier this month when Sen. Jeff Merkley (D-Ore.) tweeted a picture of his crowded flight

WHAT TO WATCH

If airlines continue to extend their policy of keeping middle seats blocked off or if they’ll be forced to book to capacity to turn a profit. Southwest and Delta have both committed to keeping their middle seats blocked off until at least the end of September, while JetBlue will do the same through July, according to the Washington Post.

Carlie Porterfield, Forbes Staff, Business

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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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