Mr Price CEO Stuart Bird told Business Report that the group’s first store in Nigeria could open in December.
For its expansion into the rest of the continent, Mr Price’s strategic focus is on corporate owned stores in areas where critical mass can be achieved.
Mr Price said that growth will be slow in the new African territories “as property is a significant limiting factor at present”. Business Day newspaper quoted Bird saying that Mr Price is currently looking at two potential store locations in Nigeria. He noted that finding the perfect property in Nigeria has been more difficult than anticipated.
How we made it in Africa earlier reported that Nigeria’s decision to lift a ban on imported textiles is opening up many opportunities for foreign clothing retailers.
Nigeria originally imposed the ban in 2003 to stimulate domestic production. This, however, only led to the smuggling of cheap clothing from Asia. Local manufacturers are also struggling because the country’s poor power supply forces them to run their operations on expensive generators.
The Nigerian government last year announced that it will lift the ban and introduce import tariffs. These tariffs were originally reported to be between 10% and 20%, but according to some sources the effective rate is much higher.
“The recent lifting of the textile importation ban in Nigeria has sharply expanded the scope of international retailers that are able to trade in Nigeria,” says Michael Chu’di Ejekam, director of Actis West Africa’s real estate division. Actis developed Nigeria’s first modern shopping mall, The Palms in Lagos, and its second facility, the Ikeja City Mall, is set for completion in 2012. Ejekam expects the lifting of the ban to increase the demand for retail space in Nigeria.
Nigeria has a number of new modern shopping malls in various stages of development. These include the Ikeja City Mall in Lagos, the Polo Park Mall in Enugu State and a planned shopping centre in Ilorin, Kwara State. Current facilities include The Palms in Lagos, the Tinapa Shopping Centre in Cross River State and the Ceddi Plaza in Abuja, to name a few.
“There is a lot of property development going on in [Nigeria] . . . and most of these new developments include a retail component,” says Dianna Games, executive director at consultancy [email protected] “The large growth of the middle class is the driving force behind this new way of shopping,” she says.