News analysis

Dion dies at the end
  • Retail group Massmart has formally started a process that could see it shut down 34 of its stores – including all its DionWired outlets.
  • That could finally spell the end of the Dion brand, after a half-century history that included inspiring Sam Walton, the founder of Walmart, which now controls Massmart.
  • But the "retailing whizz kid" behind Dion's has long moved on to body-building, and apparently early technology adopters are no longer eschewing online shopping.
  • For more stories go to www.BusinesInsider.co.za.

50 years after its creation (and 12 years after its most recent near-death experience) the Dion name could be disappearing from South Africa's retail landscape – killed off by the American behemoth it once helped to inspire.

On Monday retail group Massmart announced it was considering closing 34 of its stores. The outlets under threat include all 21 permanent DionWired stores and two pop-up stores, it told Business Insider South Africa.

Those stores are the last remnant of a brand that once dominated discount retailing in South Africa after rapid growth in the 1970s and 1980s, when its story first became entangled with that of Walmart, the company that now controls Massmart.  

Dion Stores was founded in 1970 by Dion Friedland, an entrepreneur who had already cut his teeth – and made his fortune – with a chain of furniture and appliance stores called Rave at the age of 25.

Famous, and "restless", the "retailing whizz kid" Friedland created the new chain under his first name, and eight years later bought back Rave for "next to nothing", to merge it into Dion.

By the time he sold the Dion chain in 1985, it laid claim to having the largest retail store in Johannesburg, and was said to be the biggest retailer of hard goods in the country.

But before he sold, history has it, Friedland's operation caught the eye of one Sam Walton, who came to South Africa on a five-day study tour to see what his empire (then numbering around 300 stores but not yet global) could learn from Dion.

Friedland lost a great deal of money in a stock market crash, went on to create a hedge fund, and these days is best known as a champion body builder. Walton died in 1992. But the companies they had created would meet again.

In 1990, the Massmart group was created around six Makro stores, and in 1993 it acquired what was then a group of 20 Dion department stores. Two decades later, in 2011, Walmart took control of Massmart as part of an expansion strategy that had it eyeing the African continent.

Massmart, however, had by then already lost its appetite for the Dion name, preferring Game, which it bought in 1998. After a "merger" of the two brands only 10 Dion stores remained standing – until their leases came up in 2008, when they were all closed or turned into Game outlets.

But its corporate owner was not blind to the value of the Dion brand, and in 2007 created "Dion Wired", a chain of brand new stores focussed purely on high-tech goods.

DionWired would not have the wide range of durable goods of its Dion predecessor. Instead, Massmart told its employees, it would build a reputation of being the first place you could find a new TV or camera, focussing heavily on the early adopters who just have to have the latest gadgets.

Those early adopters were not keen to buy stuff over the internet, Massmart said at the time, preferring to see products in the flesh and press the buttons before buying.

In 2012 DionWired launched online shopping, but to no great effect – and by April 2019 Massmart was telling shareholders of troubles including "limited product innovation", "stock supply challenges", and "consumer confidence".

Massmart has not specified how long DionWired is likely to remain in limbo, saying only that a "final decision regarding the potential closure of the stores" will depend on the outcome of consultation processes it will now start with staff and unions. 

See also: After 44 years, South Africa’s ‘leading comfort’ shoes Green Cross are now all imported – and the name is starting to disappear from storefronts

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