Jumbo Clothing - Enterprise Africa November 2023

JUMBO CLOTHING

Stylish Jumbo Shapes for Further Expansion

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Stylish Jumbo Shapes for Further Expansion PRODUCTION: Eleanor Sarbutt-King

Understanding and building communities like few others, Jumbo drives value for customers through sourcing brilliant fashion products and selling at fantastic prices. This has made it a trusted and reliable brand in South Africa’s rural towns for more than four decades. CEO Alan Scheckter and COO Brad Westaway tell Enterprise Africa more about continuing the impressive progress with sustained growth.

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INDUSTRY FOCUS: FASHION

Alan Scheckter, CEO

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South Africa’s Jumbo is stitched into the community, proudly bringing local people the fashion they want, for the entire family, at the right price, since 1975.

Whether its jackets and jumpers, or hats and shoes, Jumbo provides highquality, high fashion, at low prices.

For CEO Alan Scheckter, a serial entrepreneur and trader, Jumbo goes beyond just stores with good products. He tells Enterprise Africa that the business is about both delivering and creating value while enhancing the shopping experience in South Africa’s rural communities.

“Because we have been around so long, we are the biggest in those markets. We see grandparents, parents, and now children coming to us, all from the same family so it’s a generational tradition that’s being continued,” he says.

“The provenance that the business has in rural areas, and the association we have with the community is important.

We provide a huge amount of value through job creation in areas that are generally less fortunate than those in the

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cities. If you go into our revamped stores in these areas, what we bring to an otherwise basic shopping environment is mind blowing. People are so excited about access to unbelievable products at an affordable price but within an incredible environment.

Seeing people inspired and uplifted because of that shopping experience in their home town is very exciting.”

NEW SITES? Jumbo has a strong national presence with 103 stores across South Africa, mainly in the larger rural regions around the Eastern Cape. More than 1200 people work across the network, with Scheckter driving a flat structure and a family feel, ensuring an egalitarian approach to opportunities.

But to grow the business he acquired in 2007, the focus for Scheckter is on finding suitable sites, in new areas, where other retailers are not diluting the market.

“We are keen to expand north, and we want to grow further across the Eastern Cape and Western Cape,” he says.

The company prefers physical expansion, with new stores over an online outlet, because of the nature of its customers. Over the past four decades, Jumbo has created close ties with shoppers, understanding buying patterns and customer aspirations better than others.

“We have strong relationships with our partners and we have an ethical loyalty that goes both ways. There are some with which we speak every day,” says Scheckter. “We have been with some landlords for 30-40 years and while the situation is tough, with all the retailers looking for the best space, we have good relationships. We are looking at taking on a partnership with a property specialist who can assist us to unlock opportunities.

“We have some really strong areas, and we have very loyal customers who have been coming since 1975,” says COO Bradley Westaway.

“The challenge we have is that our trading environment is in sprawling rural towns, but still very rural. That involves certain periods of the month when people come from villages, which tend to be 3km to 20km away from the town, using taxis or buses.

They come to town once or twice a month and they buy their wares and do other tasks. They generally won’t come back into town for at least another two weeks because of the cost and logistical factors. For us to look at an online offering would be extremely challenging due the fact that the majority of the customer base lacking infrastructure is these live in villages that are geographically difficult to reach and limited on road, signage infrastructure.”

Typically, Jumbo customers sit in the mid to lower LSM groups however remain fashion conscious and aspirational. In these less-metropolitan environments a broad selection can be limited and Jumbo has always attempted to fill that gap with a diverse offering and something different.

“We have been upgrading existing stores with a new look and focusing

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on buying fantastic products to merchandise into these spaces which under certain circumstances would not be available,” says Westaway. “The customers journey into town is an event and is something exciting for our valued customers. It is a tangible, transactional trading environment that we have created, and that is a major contributor towards our revenue.”

He adds that the exploration of niche submarkets has been harnessed

by Jumbo as one of the only retailers to truly understand the subtle differences of markets in which it operates. The back-to-school market is key for the company and drives revenue around the post-holiday months.

The Xhosa Amakrwala traditional ceremony is also a strong driver for Jumbo, occurring twice a year.

“We are the biggest supplier of clothing and blankets for the Amakrwala initiatives during this period,” says Westaway.

To stay apace with these regular events, the company has opened between 10 and 15 stores per year (on average) over recent times. Celebrating store number 100 in Ntabankulu in

June 2023 was a real milestone for Jumbo, with numerous promotions and special offers in the store, but the team doesn’t want to slow soon.

“We want to stick to that growth trajectory, the limiting factors being the difficulty of finding great sites which tick all the boxes pertaining to geographical location, position within the town, the rentals and operating costs having to align within our business model,” says Westaway.

“In September last year, we opened four stores and not having a large

dedicated team to focus solely on opening new stores places additional pressure on our human resources in order to also manage the myriad of other tasks a business of this size continually requires, in saying that when a good site suddenly becomes available and if the numbers make sense, we go for it.”

DIVERSIFICATION While growing its footprint, Jumbo is looking to diversify its product portfolio to offer an increased basket, specifically focusing on complementary

Ntabankulu Store Opening

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INDUSTRY FOCUS: FASHION

// THE CHALLENGE WE HAVE IS THAT OUR TRADING ENVIRONMENT IS IN SPRAWLING RURAL TOWNS, BUT STILL VERY RURAL //

and drive promotions and customer interaction through that, also having to take into account that connectivity can limited in some instance in but mostly out of the towns.”

products that its core demographic is purchasing on visits into stores.

Historically based on the strength of the buying team bringing in fashion products from reputable sources, and relationships built by Scheckter and team over decades, adding new products is an exciting and never-ending project for Jumbo.

“We are quite entrepreneurial, with a very flat structure. We buy very cleverly, and we are wise with many years of experience in that regard. Some of the relationships we have with suppliers go back over 40 years,” Scheckter says

STRONG FUNDAMENTALS The two fundamentals behind Jumbo are the ability of the team to bring in quality goods that can be sold at the right price, and the competence and efficiencies to manage a large store portfolio that lives up to valued customers expectations, assisting in ensuring continued support and generational relationship with the brand.

“We have grown organically and never taken on high debt levels. This, combined with a strong, committed and dedicated team and flat structure with a family-like environment makes it a powerful and dynamic operation,” says Scheckter of the underlying nature of the business.

He has always been able to spot a deal and knows about selling. Starting out with a simple hot dog stand, growing to become a wholesaler and eventually importer and distributor, Jumbo was his client when he brought in leather jackets from Turkey. He took control of the business when it realised financial struggles in 2007, before gaining 100% control in 2018.

“My main focus is the buying and trading and my strength is not the administrative part of the business,” he smiles, tasking Westaway and the management team with keeping other elements steady, especially human capital and the growing problem of crime and shrinkage.

“We have just partnered with a company to focus on training, skills development and gap analysis, and we have put a lot of effort into restructuring our risk department to deal with the ever present potential of theft,” the COO highlights. “We have to take these things into account in our trading environment and we have structured the risk team to be extremely focussed on reducing these particular challenges, having

of the fashion partnerships.

“We have been looking at bringing certain auxiliary services on board to the existing Jumbo offering have been trialling some exciting additions which have proven to be having some success to date,” details Westaway.

This, he adds, will be fuelled by various advertising campaigns and special offers, all designed to make the shopping experience more exciting and more beneficial for customers.

“We are working on implementing a basic but effective loyalty programme, and are obviously very active on the various social media platforms

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successfully reduced our shrinkage down from 0.8% to 0.35% which is extremely pleasing. Things are ever evolving, we don’t have outsourced guards and instead focus on working with the managers to ensure they have the correct staff compliment on the store floor, in the right departments and undertaking departmental stock counts on an ongoing basis supported by annual stock takes. This has, alongside various staff incentives, contributed towards substantial savings and improved operational structures.”

Logistics in rural South Africa, moving the products from DC to 103 different stores is another challenge on its own, necessitating a well-structured and planned distribution network.

“It is more rural, and it is different to the established centres in the country,” admits Westaway. “Infrastructure,

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security, local knowledge – you must have partners that can deal with scenarios that 99% of the time wouldn’t occur in other environments.

Our stock has to arrive in stores on time for the various seasonal, promotional and varied campaigns we run at certain times of year.”

Clearly, there is a lot to look forward to at Jumbo. The team is ambitious, the brand is well-recognised, the fashion is amazing, and the community that Jumbo services continue to build a thriving and strong, mutually beneficial relationship. Scheckter is keen to push forward as Jumbo takes more market share in its chosen sectors.

“We are run with integrity and strong values and have a togetherness that you don’t find elsewhere. Everyone is treated equally and developing our people is something that gives me great

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pleasure. Someone that has come in as a casual then progressing through the ranks and going on to run a store, then becoming an area manager looking after a portfolio of 10 to 15 stores is very exciting and very rewarding.

“The business is as strong as the people and their commitment, and we have a committed bunch.”

The company, as always, invites everyone to come and experience a unique shopping experience, where you can get the best products at the best prices while feeling the Jumbo love..

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December 2023

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