PARIS – Birimian, an investment firm focused on African designers, is expanding its platform by partnering with Paris-based private equity firm Trail Capital to launch a long-term investment firm aimed at promoting the first generation of global luxury brands. continent.
Trail, which holds stakes in companies including creative consulting firm Mazarine, professional beauty brand Wella and contemporary jewelry label APM Monaco, has invested an undisclosed sum in Birimian’s dedicated investment vehicle.
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In a second phase, the two companies will raise funds with the aim of infusing € 5 million annually over the next five years into a portfolio of emerging and established heritage brands across the continent.
“We have created an investment firm that plans to have a portfolio of 20 to 30 brands within five to seven years,” Laureen Kouassi-Olsson, founder and executive president of Birimian Holdings, told WWD.
Some of the first beneficiaries will be selected from the 10 brands participating in the Birimian accelerator with the French fashion school Institut Français de la Mode, launched last year. These nominees include South African designers Rich Mnisi and Mmuso Maxwell, who have both caught Beyoncé’s attention.
Others will be chosen from among the brands that already exhibit and sell their collections abroad. In recent years, the LVMH Award for young designers has put the spotlight on African labels including Thebe Magugu, winner of the 2019 edition; Kenneth Ize; Lagos and Tokyo James Space Program.
“With Trail, Birimian has found an institutional investor who will help her achieve her mission to grow the multi-billion dollar African fashion industry and become a leader in this field. Trail will support Birimian in its value creation strategy, leveraging its vast network of partners, consultants and key stakeholders, ”the companies said in a joint statement Monday.
Xavier Marin, founder and managing partner of Trail Capital, said he sees great potential for developing African brands. The company, which has a cumulative capital of over € 850 million to date, has previously focused on helping European small and medium-sized enterprises grow in size and scope, with a specific emphasis on frontier markets. .
“We are convinced that in the next 10 years we will see the development of major African heritage brands equivalent to brands of French, Italian, British and American origin,” he said. “We want to be the catalyst to help these designers and entrepreneurs develop.”
Wary of the challenges investors face in Africa’s fragile fashion ecosystem, the platform aims to establish a new investment model distinct from traditional private equity funds, which typically hold stakes for a limited time before reversing them.
“We are positioning ourselves more and more as an operating partner,” said Marin. “And with Birimian, we will bring designers much more than capital. We will bring them the know-how in terms of production, distribution, digital development and communication. What we’re offering together is really this whole toolbox.
Kouassi-Olsson said the partnership will pave the way for a new patient investment model in hopes of succeeding where previous efforts have failed. “The resources for African brands are practically non-existent. African investors still do not believe in the opportunity of fashion and design in Africa today. It’s too far removed from the types of investments they are familiar with, ”she noted.
“We offer a different kind of return on investment based not on the sale of individual shares, but on the creation of goodwill and a strong brand that generates synergies and added value through an industrial and portfolio approach,” he said, noting this. advantage of designers, investors and textile manufacturers.
“We believe that when investors leave the company, they will get back at least three to four times their initial investment, because for us the value of the whole will be greater than the sum of the investments in this portfolio,” added Kouassi-Olsson.
But he warned that African fashion brands need to be managed differently from their more mature counterparts. Only 10 percent have a turnover of more than € 500,000 per year and only 0.5 percent earn more than € 1 million, she revealed.
With this in mind, Birimian’s first agenda was to perform due diligence on the first brand hiring in its acceleration program, which benefited from a financial audit by the audit firm EY. In addition to Mnisi and Maxwell, participating labels are Christie Brown; Gentlemen Kente; Loza Maleombho; Thousand Collines; Post Imperial; Shekudo; This is us and Umòja.
“Some brands were in big trouble because they had unsustainable debt levels and we ended up renegotiating this debt for them with their bank,” said Kouassi-Olsson. Aided by a panel of experts, Birimian helped brands identify growth levers and then presented them to buyers during Paris Fashion Week, through a partnership with WSN, the organizer of the Première Classe fair.
During the investment phase, the platform will assist planners in matters such as financial planning, manufacturing, supervising the collection and managing working capital. For example, Birimian can provide brands with enterprise resource planning software such as Zedonk, which they would not be able to afford on their own, or negotiate group rates with manufacturers.
“The problems start for designers when they are in the spotlight and start to succeed, because as soon as they reach that stage, scaling the business is literally impossible,” said Kouassi-Olsson, stating that African brands need to be open to outsourcing some of their production abroad.
The initiative is also expected to allow African designers to work in traditional luxury homes, a proposal that has been challenging so far.
“When you have your own production chain and operations in Africa and you join a big house as an art director, you can’t commute between the two all the time, so that creates a dilemma for these brands,” he said. “We can be a complementary solution by financing brands, supporting the designer, building skills, to make sure they have that international exposure that also benefits their brands.”
It is not the first time that investors have announced plans to accelerate the fashion industry in Africa. In 2018, Ghanaian entrepreneur Roberta Annan launched the Impact Fund for Africa, a € 100 million investment fund to support African creatives working in fashion and lifestyle, in partnership with the Ethical Fashion Initiative , or EFI. Little has been known about the initiative since then.
Subsequently, EFI, a flagship initiative of the International Trade Center, a joint agency of the United Nations and the World Trade Organization based in Geneva, returned to Paris Fashion Week with a showcase for designers Africans, which it hopes to transform into a mixed financial structure to mobilize investments from within the African continent, but also from Europe.
And in another sign of growing traction from African and Diasporic brands, The Folklore Group secured $ 1.7 million in pre-seed funding last week. Originally launched as The Folklore e-commerce site in 2018, the platform founded by Amira Rasool is now expanding into a conglomerate with business-to-business, consumer and media offerings.
Trail’s investment represents a vote of confidence in Birimian, just one year after its launch. Kouassi-Olsson leveraged her private equity expertise to develop what she described as an innovative model. Their joint platform will reinvest in select brands, eliminate underperforming ones, and hold holdings for up to seven years.
“The fact that there were announcements that didn’t necessarily materialize in the past made it difficult for us to convince investors,” he admitted. “We think our ambitions are reasonable.”
The partnership will give Trail, which has a solid track record in Asia, a foothold on the African continent. “We believe there is strong interest from consumers who are more inclusive and value-driven and who are sensitive to the rich heritage of these brands,” said Marin.
As part of the partnership, Birimian will open a representative office in Paris to oversee a portion of its activities, located in the Trail offices.
“I will be pleased with what Birimian is doing if we have a portfolio of around 15 brands in 2023, and of those 15 brands there are at least five with international distribution that are visible, runway shows and are critically acclaimed. and among the other 10, we have identified the next five who can achieve this, ”said Kouassi-Olsson.
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