Leader.co.za - Management, Training and Career Advice for Business Leaders







13 AUGUST 2013
Reeva Forman - Back behind the counter again
by Adele Shevel

Photo: Reeva.com
Reeva Forman is slight and glamorous, as she was decades ago when she was a top businesswomen and the queen of local cosmetics.

She works from the building that played a pivotal role in her fortunes and failures. It has seen better days: it needs a lick of paint, the garden needs tending. The building is freezing and there are no signs to direct visitors. Her office is an oasis of warmth with rugs and sunlight.

Forman built the building (the head office of Reeva, her cosmetics company) on Jan Smuts Avenue in Parktown, Johannesburg, in 1991. She paid R1m for the land, knocked down the existing building and borrowed R4m to build the property. She based the design on fashion retailer Benetton’s headquarters in Italy, a 16th-century villa that she had seen in a magazine. She flew with her architect and builder to see it and returned with the blueprint for a building that became something of an obsession and to which she clearly has an emotional attachment.

We sip ginger tea in her office. She talks about her time as South Africa’s top model, about growing up behind the chemist’s counter in Johannesburg’s Doornfontein (her father was a pharmacist). She was the first female president of the junior chamber of commerce and Businesswoman of the Year in 1983. Her turnover that year was about R10m. She had more than 2000 cosmetics distributors throughout South Africa.

She refers to herself as a “humanitarian activist”, someone involved in empowering people. She was a motivational trainer way before she started the cosmetics company. She says she started it because people wanted a way to make extra income and one of the best products to market in an upwardly mobile society was cosmetics — something of a status symbol but not that expensive.

“What I taught in the ‘80s everyone is teaching today: neurolinguistics training, emotional intelligence. Humans have the ability — with certain parameters — to control our destiny. Of course, that doesn’t always refer to, say, Darfur, where people are starving and dying in a conflict. The powers of motivational training have to be extended to a realism.”

She acknowledges that she is not good with employees. Her goal is to build independent businessmen and — women. “Call it multilevel marketing, franchising or direct selling, whatever you want to call it. It allows a human being to take full accountability and responsibility for their own lives.”

In the mid-’80s, Forman — who had had a high profile for years — became a household name when she took the Caxton publishing house to court over an article published in the now defunct Style magazine. The magazine said her business was run on the lines of a cult and was a pyramid seller. After a five-year case, the award of R1.35m to Ms Forman in 1990 was the largest by far in a local defamation suit.

“We came out of it 100% vindicated. It did not have a detrimental effect on business apart from no spare cash,” she says.

But she had taken her eye off the ball. Turnover was steadily declining. People were leaving the business.

In 1991, Ms Forman took a 10-year bond to build her headquarters. Interest rates were 14%, but increased drastically and by 1997 were 26%. Profits from the cosmetics company were used to pay for the building, leaving her business cash-strapped.

“Stupidity, ignorance, youth, perhaps the lack of a BCom MBA. I may have been a great marketer, but I should never have signed a bond with my business, home and building as surety. My background was not in business and this was to be seen when I made some very bad decisions, which nearly cost me my business.”

The phone rings and Ms Forman answers it herself. A woman wants diet pills. She takes down the order, explaining there is no delivery charge. These days she has a staff of just four.

But back to the building. It was auctioned in 2000. When the new owners took over, she rented space from them for R20 000 a month, sometimes paying late and often using her own money. “It was not a practical decision”, but “that was what I wanted. There are times one has to listen to the voice within even if it doesn’t make sense. So long as you’re not hurting anyone ... It was my money.”

With “a very unhappy partner in charge of marketing”, sales declined further over the next four years “and I sat here feeling sorry for myself, but at least I was still in the building”.

In 2004, she approached her bank on the basis that strong leases were in place and bought back the building. A month later, she says, she was offered three times the value of the bond by an international company. She did not take it. Why?

“You make money, you sit with a few million — probably invest in another property — and then what? As my partner had resigned shortly before this, I was forced to take back the marketing side of the business, to go back behind the counter again, as it were. I was absolutely overwhelmed when clients phoned and were so excited they were talking to Reeva Forman. Why sell the building? But you’re right, other people probably would have.”

To Ms Forman, the confidence in knowing she had access to money was better than having the money itself.

Someone comes to collect an order for a client in Swaziland. She greets him with a big hug and works the old computers herself. She is intent on rebuilding the business and is looking for a partner. The brand, she says, never stopped selling.
Useful resources:

Business Times
Business news and analysis supplement with a popular, people-orientated approach. Visit our website.

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