Bootstrapping Bakos Brothers broken

PUBLISHED: Mon, 24 Feb 2020 15:33:49 GMT

By Chris Bishop

It is a bitter irony in South Africa’s Budget week that one of the most robust, homegrown, retailers ever built in South Africa is in its death throes.

Whatever Finance Minister Tito Mboweni has to offer small business in his budget this week, it is too late for Bakos Brothers a family furniture firm built on fraternal hard work and sweat.

Bakos Brothers has closed all of its stores, retrenched 288 staff, and hopes to tie up all loose ends by the end of February. It has been a slow death for the store chain – one of the few left in South Africa that makes its own furniture – which made retrenchments every few months for the last two years. Costs were cut to the bone, in vain, as revenue tumbled. Everything from cheap Chinese imports to government tightening its purse strings – meaning fewer so-called tenderpreneurs –meant the numbers fell.

It saw a dramatic plunge in turnover that even the company itself finds hard to explain. In the year to the end of February 2017 the stores turned over R158 million; figures for the year to the end of this February show a mere R55 million turnover.

“Not in the 48 years of this business have we ever seen a downward cycle of retail like this,” says Ryan Bakos the CEO of the company.

“In recent years we have waited for changes under the new president, but little happened. We have decided to go and sleep for two or three years and then we might come back.”

It is a sad end to a business that began with bright optimism and elbow grease. The Bakos brothers bootstrapped the company into a household name in the 1970s by doing everything including sales and making the furniture. In the evening, the brothers would take off their suits and put on overalls. They would make deliveries to their growing market among the up-and-coming high rise residents of Hillbrow in Johannesburg. Often they would have to haul on ropes to lift lounge furniture to the upper floors.

The next morning, back in their suits, the brothers would deposit the cash collected the night before to keep the young business going.

Bootstrapping that sadly came to naught nearly half a century on.             

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