THE SALA WEALTH SUMMIT
Illusive Luxury What is luxury? Private Edition reports on some of the key issues raised by thought leaders at the inaugural 2012 SALA Wealth Summit. Words HANNAH MOORE
The growth in SA’s luxury market is driven partly by investors’ penchant for innovation and custom design and partly by their appreciation of art. Louis Vuitton – and the brand’s Neverfull bag in trademark monogram canvas – is a case in point
THE SALA WEALTH SUMMIT
‘Peel me a grape, crush me some ice; skin me a peach, save the fuzz for my pillow.’ Canadian jazz singer/songwriter Diana Krall was on the right track with her take on luxury, but can we really define it down to the senses? Sure, for some it’s that beautiful villa in Monaco reserved for annual holidays with the family, or that bespoke Bentley you keep safely tucked away until Sunday afternoon when it’s time for a glide about the countryside for a little fresh air. As a market, luxury has got to be one of the most difficult to analyse or address successfully, despite its six percent growth rate per annum, according to Bain & Company consulting guru Andrew Tymms. Thanks to the Sunday Times Rich List, we know, at least, that the stats are in our favour. The country’s wealthiest 20 individuals are worth over R110 billion and they’ve seen their wealth jump by nearly 60 percent in the past two years. But the luxury market is so illusive, so tricky to understand precisely because ‘liquid moderns’ – a description of a sector of society living in constant uncertainty coined by sociologist Zygmunt Bauman – seek intrinsic value: breathing space, a moment of solitary splendour, the unforgettable experience of trekking through the Antarctic or the thrill of lapping a McLaren at 260km/h around your private racetrack. The top echelons of the liquid modern sector anchor themselves this way, often seeking out the
Silvana Bottega Founding Director of SALA ‘Having spent large spans of my life in China and South Africa, I’ve always been intrigued by the speed of take-up of luxury in emerging markets and the role that it plays inspiring a nation to reach higher and to move forward. Many view the very notion of luxury with disdain when thinking about the critical issues of unemployment and poverty in our country. However, as an association, we believe the sector holds latent opportunity that just needs to be realised. In terms of producing our own luxury goods, South Africa is
meaning to wealth in these extreme experiences. The 2012 Euromonitor Luxury Goods Research reported value sales of R5,6 billion (US$684 million) in 2010, and Credit Suisse is expecting the degree of affluence to rise with 71 000 dollar millionaires in SA. That number is expected to triple to 242 000 in the next five years. Silvana Bottega, founding director of the Southern Africa Luxury Association (SALA), recognised the disparity between the growth of this industry in SA and the lack of shared knowledge among its entrepreneurs. And so, with blood, sweat, tears and a few bottles of fine wine from her family vineyards in Stellenbosch, she masterminded the inaugural SALA Wealth Summit in March this year. Chaired by award-winning editors Marc Ashton of Finweek and Les Aupiais of Private Edition, the summit was successful beyond Bottega’s wildest expectations, she later said. The two-day event was a platform from which to share new insights into the growth of luxury in SA. ‘Talking about luxury isn’t PC in SA,’ said Samuel Seeff, chairman of the international property company Seeff, and one of the conference’s first speakers. ‘But we have to begin understanding this market we’re playing in.’ It’s one that plays in the rarefied air of innovation and custom design. Seeff knows luxury when he sees it, although, for him, it can come in many different shapes and
sizes: an Olympic-sized indoor swimming pool; a centralised electronic brain that coordinates everything from your electricity consumption to your entertainment system; a gentleman’s lounge; a climate-controlled wine cellar; a temperature-controlled cupboard; vineyards and orchards. And perhaps multi-car garaging, fit for, oh, let’s make it 16 collector’s cars. Bag a property with even two or three of these amenities and you’ll have yourself a pretty little investment package. Should you already be the owner of such a property gem, Seeff’s advice is to hang onto it while the market is still in your favour. Leaving the number-crunching behind, Marc van Olst, a partner in a venture capital fund that supports local enterprises delved, rather bravely some might say, into the topic of corporate philanthropy. He noted the Barclays Wealth research that calculates that we are the second most generous nation in the world when it comes to using our money for a good cause. Before we begin patting ourselves on the back though, perhaps we should look at why there is such a desperate need for social investment in SA in the first place. ‘Our social security system should resemble that of Brazil, where the cost of education, health and infrastructure is simultaneously brought down.’ Van Olst had his audience nodding in sober agreement at that. ‘When you do decide to do good with our
host to exceptional artisans and a wealth of resources. Capturing the full value of our resources through the creation of our own international luxury marques has only just begun. With the rise in wealth and a firmly established financial services sector to service the flourishing new elite, South Africa is well placed to be a safe regional hub for businesses that service affluent clients across Africa. The true potential of South Africa, worthy of its place among the BRICS, needed a stage for luxury and wealth management. The SALA Wealth Summit is the confluence
point between two spheres: those who manage wealth and those at the helm of luxury businesses urging their clients to invest in la dolce vita by buying a repertoire of brands that appeal to their discerning taste. We were proud to have orchestrated a line-up of 30 speakers, including CEOs from Sanlam Private Investments, Old Mutual Wealth and FNB through to the established marques of Aston Martin, Execujet and the like. We don’t focus purely on international brands, but also highlight the wonderful success stories of local provenance, such as Singita, Malée and Okapi.’
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THE SALA WEALTH SUMMIT
wealth, bear in mind the danger of market failure,’ the social entrepreneur was quick to add. ‘Find a reputable fund manager, favour self-sustaining projects and always invest with your head, not your heart.’ When Andrew Bradley of Old Mutual Wealth stepped to the floor not long after, he, too, asked some pointed questions: Is more money a curse? Is anything in life, let alone our wealth, guaranteed? According to Bradley these are some of the issues plaguing the high-net-worth individual, whose need to control their anxieties is now more pressing than ever. Fittingly, the greatest value that financial analysts of this industry might add is to assist this very particular kind of customer in managing his often unpredictable behaviour and in not destroying his wealth. If adding a dent to your finances comes in the form of a Rolls Royce from Daytona, Justin Divaris might be quick to help you look on the bright side. Brimming with energy and passion for what he does, Divaris had the delegates’ full attention as he spoke of his rise to the position of Daytona Group CEO. ‘Where many salespeople go wrong in this industry is to pre-judge their customers and make their brand entirely unattainable to the apparently unlikely customer,’ he explained, reminding us that it’s not always about the hard sale and that spotting the well-heeled often takes more gut feel than reading the obvious and clichéd signs that point to a moneyed individual. Dr Michael Jordaan of FNB, one of SA’s most dynamic leaders in the financial industry, closed the first day. One might have expected a CEO with 28 years’ experience in the financial industry to talk moolah and not much else, but with his characteristic (and somewhat disarming) sense of charm, Dr Jordaan spoke less about the means
and more about the end – a state of happiness and contentment. ‘Some people have all the attributes required to attain wealth – they’re married to their work and they’re stingy. But once they arrive, they have no idea how to enjoy what they’ve spent their lives working for.’ Delegates were reminded that to truly enjoy wealth is to understand an art, that the best way to be happy is to care for others, and that compassion and wellbeing can be enhanced through training and through a state of gratefulness. Day two was kicked off by Aupiais. Knowledgeable about the multiple facets of talking the language of luxury, she pointed out that several publications that dabbled in the luxury end of the market adopted the ‘marksman’ approach – firing a high-velocity luxury bullet at them without taking into account all the vagaries of trajectory, gravity and a moving target, with the result that you miss by a mile. The trick it seemed was patience, instinct, knowledge of territory and luck – a bit like the art of fly-fishing. As contradictory as it may seem, nature plays a powerful role in the luxury market. Many top local designers, including the likes of Trevyn McGowan, Stefan Antoni and Haldane Martin – all speakers at the summit – have recognised ecologically viable concepts of art as one of the most powerful tools in reaching top-spending consumers. Also touching on the creative heartbeat of South Africans, Haldane quipped, ‘The French might have style, the Germans may be technologically advanced and the Italians might fetch the highest prices, but SA has an uncapped creativity that can’t be replicated anywhere on earth.’ That extended to the art of investing in fine wine. One of SA’s leading wine authorities, Michael Fridjhon, spoke right to the hearts and
minds of those wishing to own (or already in ownership of) ‘a piece of grape-growing dirt’. The per-litre price of Bordeaux wine may not have increased in 15 years, and you might be one in 1 000 if you turned your wine farm into a profitable business, but a bottle of vintage wine or French Champagne is, and will remain, a quintessential statement of wealth. Heed a word from the wise, though: If you want to make it in the luxury wine industry, you should spread your product thinly and never discount in the tough times. This is a market that doesn’t respect weakness. The market also reveres integrity. Hanneli Rupert, founder of the accessories line Okapi and Merchants on Long, an African concept store in Cape Town, believes that luxury goods should tell a story, a parable of African beauty. She believes they should speak a tailored language – that of the New African. A prime example of African beauty herself, the summit’s final speaker was Zeze Oriaikhi. The creator of the high-end cosmetic brand Malée, she shared the heartfelt story about how the African woman has inspired her to get where she is today. Leaving the room quiet and emotionally charged by her talk, Nigerian-born Oriaikhi is an example of what we’ve already achieved and of what we might still hope to achieve, as the thought leaders of the luxury market in SA. In the words of Lucia van der Post, founder of the Financial Times’ How to Spend It, we celebrate the uniqueness of African luxury because ‘there is nothing tired or overworked about it... It has something entirely new and refreshing to offer to a world that is perhaps jaded from many years of superfluous consumption.’ For more information on SALA and the annual Wealth Summit, visit www.sa-la.org.
PHOTOGRAPHY: supplied
Haldane Martin makes SA’s uncapped creativity point (left) while the Paul Smith Jeans Spring Summer 2012 collection speak to the standard of luxury brands (right)