Entrepreneurship Zone: 26 May 2021: Seasoned investor sees opportunities in African luxury and premium brands

Wed May 26 10:16:15 CAT 2021

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Entrepreneurship Zone: 26 May 2021: Seasoned investor sees opportunities in African luxury and premium brands

Laureen Kouassi-Olsson, an experienced financial services and private equity executive, recently announced a new investment firm, Birimian, which seeks to back African fashion and luxury brands. She talks to James Torvaney about her plans.

You have extensive experience within the business world, including with traditional private equity firms such as Amethis and Investisseurs & Partenaires. What made you decide to set up an investment company focusing on the luxury industry?

I’ve always been a strong advocate of bringing about change through private capital. Even before I moved back full-time from France to Côte d’Ivoire in 2016, I was travelling a lot across sub-Saharan Africa. I’d always been passionate about fashion and design and started meeting and building relationships with talented African designers.

The last few years have seen a huge increase in international awareness and interest in African designs and brands. I set up Birimian as a means to use my investment expertise to help talented designers build great companies and connect with international markets.

Into which types of companies is Birimian looking to invest?

Our focus is on building premium African heritage brands; creating the African equivalents of the likes of Dior or Chanel. These could be in fashion, cosmetics or food and beverages – based on the continent or in the diaspora – but there must be a clear link to our core, which is African heritage and tradition.

We make investments in the form of long-term equity or convertible bonds, from $30,000 to $3 million, as well as providing capacity building and support services. Our goal is to help build long-term ecosystems that allow designers to access the expertise and tools to grow from informal operations into global brands.

Tell us about the main criteria Birimian is looking for in an investment.

The main criterion is creativity. The products and brand should be exceptional and offer a unique proposition. The designer should be someone which whom we can build a good relationship.

When we invest in a company, we have to make sure they have distribution capabilities and the capability to scale, and that they are already profitable or have a clear path to profitability.

Explain a bit more about Birimian’s investment structure.

To be clear, this is a permanent investment vehicle and not a traditional private equity play. Based on my investment experience across the region, I don’t believe the standard private equity model would work well for emerging African brands. Exits are difficult because there is no clear secondary market and there is more execution risk than with a traditional private equity investment. We have managed to build a compelling case for investors that is not reliant exclusively on exits. I see this kind of long-term investment vehicle with technical support services as being the future of capital on the continent.

Name the areas within Africa’s luxury industry you are most enthusiastic about from an investment perspective.

We are excited about digital-first, consumer-focused brands that are vertically integrated from sourcing through to customer sales, with an international appeal, whether in fashion and accessories, cosmetics or food and beverage.

Many global trends are converging that make this the right time to invest in these companies. The international market is changing and consumers are seeing an increased interest in transparency, sustainability and in African brands in general. Digitalisation allows African direct-to-consumer brands with a powerful story to reach a global audience that they would not have been able to a few years ago.

The pandemic has also shown us how effectively we can work from home with dispersed teams. It means brands that are based on the continent can have flexible and international organisations, and link with industry expertise from across the world.

Are you looking to invest in companies focusing on the export market, or those catering to domestic consumers?

To create brands with indisputable heritage, you need to go worldwide, and our focus is on supporting companies with global aspirations. What we have seen over the last few years is a particularly strong and growing market for African designers in countries such as France, the United Kingdom and the United States, but trends constantly evolve and we are taking a truly global approach to our end markets.

Unfortunately, one of the characteristics of the luxury market in Africa is that wealthy African consumers spend a lot more on non-African brands, which can be seen as something of a status symbol. While we want to strengthen production capabilities in the local markets, our primary sales focus is on growing internationally, with the expectation that continental trends will follow.

Are there areas of the luxury industry you would be hesitant to invest in?

There aren’t any specific areas within the luxury goods market that we avoid per se, although we do not invest in products such as tobacco or alcohol, which form part of the exclusion list of many of our investors. We also don’t invest in companies that have a purely domestic outlook or are not engaging with their customers via digital channels.

What are the biggest growth challenges facing the companies in which you seek to invest?

The issue for these premium African brands is not in demand for the products or a shortage of creative designers on the continent. There are far more exciting brands than we could ever hope to invest in. The biggest challenge is execution; companies face infrastructure gaps such as access to electricity, human resources or distribution systems.

There are so many things to tackle but our primary focus is on raising production capacity to meet international demand. We take brands with a digital focus and global appeal, and offer them refinancing, an ecosystem of industry experts and professional services, build distribution chains and then focus on production.

When you look at the well-known international luxury brands like YSL or Chanel, behind every successful designer is a well-organised company with the right set of operations. Our model is to let the designers take care of the design process while we focus on the challenges of execution.-Howemadeitinafrica

Laureen Kouassi-Olsson, founder and CEO of Birimian

Invest Wisely!

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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