PARIS — Birimian, an investment firm focused on African fashion designers, is expanding its platform through a partnership with Paris-based private equity firm Trail Capital to create a long-term investment firm that aims to create the continent’s first generation of global luxury brands to promote.
Trail, which holds stakes in companies including creative consultancy Mazarine, professional beauty brand Wella and contemporary jewelry label APM Monaco, has invested an undisclosed sum in Birimian’s special investment vehicle.
In a second phase, the two companies will raise funds to pour €5 million annually over the next five years into a portfolio of emerging and established heritage brands across the continent.
“We have set up an investment company that plans to have a portfolio of 20 to 30 brands within five to seven years,” Laureen Kouassi-Olsson, founder and CEO of Birimian Holdings, told WWD.
Some of the first beneficiaries will be chosen from the 10 brands participating in Birimian’s Accelerator with French fashion school Institut Français de la Mode, launched last year. These candidates include South African designers Rich Mnisi and Mmuso Maxwell, both of whom Beyoncé caught the eye.
Others are chosen from among brands that already show and sell their collections abroad. In recent years, the LVMH Prize for Young Designers has put African labels in the spotlight, including Thebe Magugu, winner of the 2019 edition; Kenneth Ize; Lagos Space Program and Tokyo James.
“In Trail, Birimian has found an institutional investor who will help him fulfill his mission to grow Africa’s multi-billion dollar fashion industry and become a leader in this space. Trail will support Birimian in its value creation strategy and leverage its extensive network of partners, consultants and key stakeholders,” the companies said in a joint statement on Monday.
Xavier Marin, founder and managing partner of Trail Capital, sees great potential for the development of African brands. The company, which has managed accumulated capital of more than €850 million to date, has previously focused on helping European small and medium-sized companies increase their scale and reach, with a particular focus on frontier markets.
“We are convinced that in the next 10 years we will see the development of major African heritage brands on par with brands of French, Italian, British and American origin,” he said. “We want to be the catalyst that helps these designers and entrepreneurs evolve.”
Given the challenges facing investors in Africa’s fragile fashion ecosystem, the platform aims to establish a new investment model that differs from traditional private equity funds, which typically hold shares for a limited time before investing turn them around.
“We are increasingly positioning ourselves as an operational partner,” said Marin. “And with Birimian, we bring designers much more than just capital. We bring them know-how related to production, sales, digital development and communication. What we offer together is really this whole tool kit.”
Kouassi-Olsson said the partnership would pave the way for a new patient investment model, hoping to succeed where previous efforts have failed. “Resources for African brands are virtually non-existent. African investors still don’t believe in the opportunities for fashion and design in Africa. It’s way too far removed from the types of investments they’re familiar with,” she noted.
“We offer a different type of return on investment, not based on the sale of individual holdings, but on the creation of goodwill and a strong brand that generates synergy and value through an industrial and portfolio approach,” said they become designers, investors and textile manufacturers benefit equally.
“We believe that when investors exit the company, they will get back at least three to four times their original 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 she warned that African fashion brands need to be handled differently than their more mature counterparts. Only 10 percent have sales of more than 500,000 euros a year and only 0.5 percent more than 1 million euros, she revealed.
With this in mind, Birimian’s first task was to conduct due diligence on the initial inclusion of brands in its accelerator program, which benefited from a financial review by accounting firm EY. In addition to Mnisi and Maxwell, the participating labels are Christie Brown; Kente gentlemen; Loza Maleombho; Mille Collines; postal emperor; shekudo; This is us and Umòja.
“Some brands were in big trouble because they had unsustainable debt, and we ended up renegotiating that debt with their bank for them,” Kouassi-Olsson said. With the support of a panel of experts, Birimian helped brands identify growth levers, then introduced them to buyers during Paris Fashion Week via a partnership with WSN, organizers of the Première Classe show.
During the investment phase, the platform supports designers on topics such as financial planning, production, collection monitoring and working capital management. For example, Birimian can provide brands with enterprise resource planning software like Zedonk that they could not afford on their own, or negotiate group rates with manufacturers.
“The problems start for designers when they get the spotlight and become successful, because once they get to that stage, scaling the business is literally impossible,” Kouassi-Olsson said, saying African brands need to be open about some of their manufacturing into to outsource abroad.
The initiative was also intended to give African designers the opportunity to work in traditional luxury homes, a proposal that has so far presented a challenge.
“If you have your production chain and operations in Africa and you move to a big house as an artistic director, you can’t commute between the two all the time, which creates a dilemma for these brands,” she said. “We can be a complementary solution by funding brands, supporting designers, strengthening capacity to ensure they have that international visibility that their brands benefit from too.”
It’s not the first time investors have announced plans to accelerate Africa’s fashion industry. In 2018, Ghanaian entrepreneur Roberta Annan partnered with the Ethical Fashion Initiative (EFI) to launch Impact Fund for Africa, a €100m investment fund to support African creatives working in fashion and lifestyle. Little has been heard from the initiative since then.
Subsequently, the EFI – a flagship initiative of the International Trade Centre, a Geneva-based joint agency of the UN and the World Trade Organization – returned to Paris Fashion Week with a showcase of African designers it hopes to transform into a blending facility investing within the African continent, but to mobilize also from Europe.
And in another sign of the growing appeal of African and diasporic brands, The Folklore Group secured $1.7 million in pre-seed funding last week. Originally launched as e-commerce site The Folklore in 2018, the platform founded by Amira Rasool is now growing into a conglomerate with business-to-business, consumer and media offerings.
Trail’s investment is a vote of confidence in Birimian, just one year after its launch. Kouassi-Olsson has used her private equity expertise to develop what she calls an innovative model. Their shared platform will reinvest in some brands, divest underperforming brands and hold stakes 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,” she acknowledged. “We think our ambitions are reasonable.”
The partnership will bring Trail, which has a strong track record in Asia, to the African continent. “We believe there is strong interest from consumers who have a more inclusive and values-based approach and who are sensitive to the rich heritage of these brands,” said Marin.
As part of the partnership, Birimian will open a Paris office at Trail’s offices to oversee part of its activities.
“I will be happy with what Birimian is doing when in 2023 we have a portfolio of about 15 brands, and out of those 15 brands there are at least five with international distribution, visible, doing catwalk shows and being critically acclaimed. and among the 10 others, we’ve identified the next five that can do that,” said Kouassi-Olsson.
Ethical Fashion initiative to launch Paris Fashion Week events
Change Agents: Skip Luxury in Africa with Technology and Funds
Is Africa the next golden continent of luxury?