Virgin group plans assault on South Africa

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JOHANNESBURG -- The South African launch next month of model agency Storm Models will mark the entrance of the third Virgin Group product to this market in less than a year.

It certainly won't be the last. Richard Branson's fast-growing empire has big plans for South Africa, ultimately including control of the state-owned South African Airways when privatized, Virgin Direct, Virgin Cola, Virgin Megastores, plus clothing and cosmetics products.

But not all at once. Though opportunities for financial services company Virgin Direct are being assessed, South Africa-based Corporate Affairs Director Tracey Meaker says the company is currently preoccupied elsewhere and "won't be able to focus on South Africa for some time yet."

Another team is looking at the South African soft drinks market and the launch of Virgin Cola is expected within six months, though Virgin will have watched with interest the recent failure of Pepsi-Cola here. This could be followed by Virgin Energy, the high-energy drink.

Branson is almost as much a folk hero here as he is to the British, and his enthusiasm for this country has grown with the success of Virgin Atlantic Airlines. The airline launched last October (simultaneously with Virgin Vodka) with three London-Johannesburg flights a week and by July was flying daily with 80%-plus load factors.

Next may be a direct flight from London to Cape Town. Virgin has withdrawn its bid for Sun Air, a small domestic airline undergoing privatization, to concentrate on the South African Airways bid.

Though 30 Megastores, are visualized, selling CDs, videos and clothing, development is unlikely until the conclusion of a worldwide consolidation process in Virgin Retail, the holding company. "Virgin Retail is very interested in the opportunities here but has no plans just yet," says Meaker.

Copyright August 1997, Crain Communications Inc.

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