He made the announcement to colleagues in an open letter dated 4 February.
“In 2004 I pursued a dream. At the time it seemed unimaginable and borderline crazy, but now the dream is a living, breathing, community of people built around a loved and trusted brand…” Fuhr wrote.
The business has grown to more than 200 outlets in South Africa – after a shaky start. Fuhr regularly recounts how in the early years, Sorbet was mistaken for an ice-cream rather than a beauty parlour.
He has previously acknowledged the risk of UK expansion but said the opportunity to expand into that market was too tantalising to pass up. To staff this week, he wrote: “if you are not failing every now and again, it’s a sign that you are not trying anything bold...”
Fuhr had spearheaded the Sorbet UK expansion following the R116 million sale of the business to JSE-listed Long4Life in 2017. He believed the UK market, much like the South African beauty sector in 2004 when he started out, was ripe for consolidation and could be corporatised.
He recently told me that he had not anticipated the difficulty in setting up in a new country. He shut the group’s four London stores toward the end of January, citing the uncertainty brought by Brexit, the cost of setting up operations in Britain in rands, and a “different work ethic” to what he was used to in South Africa.
It’s not clear how much capital Sorbet committed to the UK market, and the company is not saying. But in choosing to cut its losses sooner rather than later, Long4Life is avoiding the trap so many other large South African companies fell into, and which forced them to write down billions. Brait and Famous Brands are two of the most notable South African examples of executive hubris in trying to diversify from their home base with disastrous consequences for investors.
It’s likely Long4Life CEO and founder, Brian Joffe, was unwilling to keep throwing good money after bad and did not want Sorbet’s UK business to become a distraction.
The speed of the Sorbet shutdown suggests Joffe (who built Bidvest and its recently unbundled global food services business Bidcorp) won’t risk his reputation as a superior allocator of capital for over thirty years on pursuing a potential folly 12,000 kilometres from his Rosebank home base.
Fuhr has had a long and varied entrepreneurial career, earning his stripes in businesses as diverse as industrial theatre and running his own retail business in downtown Johannesburg. This not only saw him butt heads with US trademark attorneys over his branding (his shop shared a name with the American retail giant K-Mart), but during the PW Botha era, his business was one of the first in South Africa to openly appoint a black manager who supervised white staff.
He carried that same ethos into Sorbet and regarded the franchise model as a mechanism for empowerment.
In his letter, addressed to “the Sorbet community” Fuhr stresses that “it is a place that empowered female entrepreneurs to own their own businesses and then further empowered many other women and men to build careers and to sustain their families.”
Bruce Whitfield is a multi-platform award-winning financial journalist and broadcaster.
Also from Bruce Whitfield: