There were times in the last two years when Penelope Rodenhurst, the founder of the kids and tweens clothing brand Precioux, thought so too. She remembers particularly one occasion when she was sobbing into a heap of expensive material ruined by a printing contractor, asking herself: “How on earth did I get here?” Naivety, impulsiveness and foolhardiness, she thought at that stage.
But the real answer to her question is a story of ambition, courage, entrepreneurial acumen and a steely determination. And although the business is still young, it is already a story of overcoming great odds.
Penelope’s entrepreneurial bent – at least the chutzpah aspect of it – emerged early. As a young British school-leaver, she had an opportunity to study at Cambridge Teacher training college, but she talked herself onto an exclusive management cadet course at Marks & Spencer (M&S – the British equivalent of Woolworths), even though applications for the sought-after positions had already closed.
Her decision was taken partly because her parents were struggling financially as they were starting up a country house hotel in Wales and partly because she “felt ready for the world of work”. It turned out to be just the right grounding for the chain of mall-based clothing stores that she were to start from scratch in South Africa two decades later.
As soon as she finished the M&S training programme, she joined the sales team of the pharmaceutical giant Glaxo and climbed the corporate ladder for the next ten years. It was high-powered and lucrative, and would have kept her shackled in the corporate world – and possibly also in a failing marriage – were it not for a life-changing event.
She almost died in hospital when she was operated for an appendicitis which actually turned out to be severe endometriosis. She was lying in her recovery bed and trying to get some work done on her laptop when she realised that she needed to take charge of her destiny. She had no support from her husband and desperately wanted to spend time with her son of 18 months.
Penelope resigned, cashed in the shares she earned at Glaxo, got divorced and was still recovering at her parent’s hotel when she limped into a banker’s office with a killer business plan for buying a run-down hotel/nightclub in Wales and turning it into a hotel of her own. He loved the plan, but turned it down because of her health. But she recovered, and not long after another bank backed her plan.
Three years later she had a thriving four-star, 16-bed hotel and conference centre with four restaurants. In 2005 she was acknowledged as the Welsh businesswoman of the year. But her real achievement was reading the market. By 2007 her intuition told her that the booming economy was going to turn, and she decided to sell. The proceeds from the sale came in just as the world markets crashed spectacularly.
Suddenly, Penelope and her new life partner found themselves “with a pot of money” and nowhere to invest in the economic ruins around them.
It turned out to be South Africa’s gain as their attention shifted to Cape Town, where Penelope’s parents habitually spend the British winter. They “fell in love with Africa”, says Penelope – the outdoor lifestyle, the food and wine, the “earthy values”.
With no clear plan in mind, they emigrated to South Africa in 2008 and invested in property while considering various opportunities in the local hotel industry. None had stood out by the time Penelope met a jewellery designer, a fellow mom at her son’s school.
Together, they started developing a network-marketing, catalogue-based system to sell a range of silver jewellery called Precioux (pronounced precious). It didn’t work, partly because South Africa has a strong mall-shopping culture as opposed to catalogues, but it served Penelope well as an introduction to South African business and the fashion trade. More importantly, she kept the brand name Precioux.
Penelope got the idea for a tween clothing range through her own struggles of trying to find quality funky clothes locally for her eight-year- old daughter, and noticed how her daughter’s friends loved the clothes she got from the UK.
With her characteristic mix of impulsiveness and tenacity, Penelope launched herself into turning Precioux into a clothing brand aimed at kids and tweens aged between 2 and 16, and has since been climbing a gargantuan learning curve over the past few years. At first she tried the direct marketing route, but soon realised that she needed retail outlets.
The business required economy of scale, and in a bold move she launched two Precioux shops, one in Somerset Mall and another at Cavendish Square, within 48 hours of one another in 2011. These were in two of the biggest malls in Cape Town, but to make the business viable she needed more outlets, and shortly afterwards she opened another outlet in Sandton, which “took off from day one”.
Her business management experience and her original retail training came in handy, but she still had loads to learn about the fashion industry, particularly local fashion culture, right down to the differences in clothing tastes and seasons between Johannesburg and Cape Town.
But it was on the manufacturing side where she underwent her most hair-raising crash course. She had recruited an excellent fashion designer, and for a year she tried to outsource her manufacturing to local cut-make-and-trim contractors. There were many disasters of one botched production run after the other, not made any easier by the difficulty of sourcing good quality right priced textiles.
Eventually, against all the clothing-industry trends of retrenchments, outsourcing and focusing solely on design and brand building, Penelope had no choice but to set up her own factory in Woodstock, which today provides work for 13 machinists, plus a support technical team of 7 other staff.
There is a strong message in Penelope’s story for government agencies and unions who agonise over the demise of clothing factories in South Africa. She explains that it is only large corporates that can afford to outsource production to the East – and they do – because orders have to be of a certain minimum size. Because of her small scale, the only affordable way for her to produce high-quality small runs is to have her own factory. The answer to creating manufacturing jobs, it seems, lies with small, niche start-ups like Precioux.
Although each individual shop was doing well, Penelope’s whole operation still needed scale to become viable, but the factory and three outlets had depleted all the liquid capital that she had. She needed finance, but as soon as the banks saw “clothing manufacturing” on the business plan, they recoiled.
Not Business Partners. Based on her business plan, the entrepreneurial risk financier financed three more outlets, so that the Precioux chain totals six outlets today.
The straight term-loan agreement was followed up with a subsequent injection of working capital.
Precioux is still far from any kind of comfort zone. Penelope is determined to open or franchise three stores a year for the foreseeable future to build Precioux into a universal kids brand.
Perhaps she will bring in an investor, she says, perhaps bank finance will become available in future. But for now, apart from the finance, Business Partner’s faith in her business was an important psychological boost – just what she needs for the long road ahead.