Leading the way in adventure clothing
In the low-margin and the seemingly endless decline of the South African sector because of imports -- the K-Way brand is a positive story.
The K-Way outdoor and technical clothing brand is a division of Cape Union Mart Group, one of the largest family-owned retail chains in South Africa. K-Way brand clothing is exclusively sold in the group's 70 stores. Its other, smaller, retail chains are Old Khaki and Poetry.
The K-Way clothing factory in Ottery, Cape Town, employs 190 people and the local cut, make and trim factories to which it subcontracts some production employ about 100 people. That is small compared to the mainstream clothing factories, but the difference is that K-Way has been employing more people in the past few years, not less.
Nonetheless, like many bigger factories it has also suffered severe loss-making periods in its past.
Mainstream clothing factories have been shedding labour because of rising imports from Asian countries, which enjoy low labour costs, large production runs and subsidies.
Andre Labuschaigne, chief executive of Cape Union Mart, said imported products were generally "low-complexity products with all value-add removed and we cannot compete with them on price alone without sacrificing quality.
"However, we have succeeded in building a sustainable advantage by, first, manufacturing the best top-end technical adventure clothing using the latest production technology and, second, by focusing on high efficiency in operations."
Labuschaigne said K-Way's "lean" manufacturing programme meant that rates of returns for repairs had plummeted, as had rejects. Absenteeism had also fallen, efficiency levels had risen and employment opportunities had increased by 8% over the past five years.
Having an integrated manufacturing and retail setup is another reason for the company's success. When shopper demand for a certain colour or cut of garment rises, production can be switched to supplying that within days. Although the group is less linked to the current trend towards "quick fashion" than more fashion-orientated retailers, its vertical integration means that its stores are less likely than other retailers to be out of stock of K-Way products.
K-Way branded product sales have grown at a gallop – fivefold over the past eight years.
Labuschaigne said K-Way had invested to enhance its design and production capabilities – R5-million was recently spent on equipment and machinery and factory extensions. K-Way has also done design innovations for technically advanced garments that can withstand harsh weather conditions. For instance, it was the first manufacturer in Africa to introduce sew-free technology that allowed it to make waterproof seamed-seal clothing.
Increased mechanisation has meant that job opportunities have increased more slowly than sales, but it has also resulted in adding to the skills of staff. Mechanisation has increased in the design and cutting stages with the help of an advanced laser machine, but thereafter sewing and sew-free production are still mainly manual.
Like most of the surviving clothing companies in the Western Cape, K-Way bought out the assets of clothing companies as then-famous names were failing.
Cape Union Mart was established in 1933, but in about 1980 Arthur Krawitz, the second-generation leader of the business, decided it needed to secure its own sources of local supply and in 1981 it acquired the Hepworths manufacturing operation.
Labuschaigne said incentives from the national government had helped the company to buy machinery, and the Western Cape government's Cape clothing and textile cluster initiative had been important in gaining shared knowledge.
Most of all, though, the group has thrived by having distinctive stores and distinctive products.
Labuschaigne said the clothing industry was still a tough one, even for K-Way, but the lesson seemed to be that smaller, more focused and better-integrated clothing production can be a route to success.