Nick Kaoma is the CEO and cofounder of the local urban streetwear brand HeadHoncho, and here he shares a few of their winning business savvy strategies that saw them through the recession and what is expected to be a double dip(a recession followed by a short-lived recovery, followed by another recession). 

 

1) Ways in which we’ve expanded the business:

 

In 2010, we expanded our business by extending our product line. In our first year of being operational, we focused on producing traditional streetwear styles such as t-shirts, caps and hoodies. The following year, we expanded our product line and introduced cardigans, shorts, baseball jackets and shirts into our range.

 

Since these items were a refreshing addition to our collections, they performed considerably well and helped triple our revenue. In 2010, we officially introduced a womenswear range. This highly-anticipated range featured t-shirts, tank tops, sweaters, dresses and off-shoulder tops.

 

This year, we concluded a deal with Sportscene, the major sports and streetwear retailer, making us the only local brand in their chain. As a result of this transaction, Head Honcho expanded its retail presence with 10 more stores spread across the country. Through Sportscene we are now able to reach consumers in KZN, Free State, and Eastern Cape, as opposed to just Gauteng and Western Cape last year.

 

This wider retail network has significantly boosted our revenue.

 

2) Collaborations:

 

In late 2010, we collaborated with Channel O, the biggest music channel in Africa, to produce a range of clothing under the moniker “Young, Gifted & African”. The range has been in stores for more than 6 months and features men’s and women’s styles such as t-shirts, tank tops, crewnecks, hoodies and caps.

 

Channel O prides itself on being “Original African” while our motto is “Live Progressively”. We combined the respective qualities of the two brands and the result was a colourful and fresh range that spreads a “Proudly African” image.

 

This range however is not merely a branding exercise. We have produced quality products that are being demanded by consumers. This “YGB” range has done well at Sportscene and Shesha and thus proves that collaborations should also aspire to make commercial sense

 

3) Post-recession initiatives:

 

Post-recession, the retail sector has obviously struggled a bit. We’ve also experienced slightly slower sales this year due to our consumers having less disposable income.

 

Going into the last half of the year, we have elected to decrease prices by at least 20% on select styles. As much as we have successfully positioned Head Honcho as premium brand, we are aware that consumers are currently very price sensitive and will go where they feel like they’re being offered a bargain of sorts.

 

To that effect, we’re also working very closely with our suppliers and manufacturers to decrease our manufacturing costs. These savings will then be passed on to the consumer.

 

During this period, we’ve also had to accelerate our marketing efforts. Our partnership with Channel O guarantees us free airtime to promote the “Young, Gifted & Black” range. This and other forms of marketing have increased Head Honcho’s brand equity and to some extent make our prices justifiable.