Sunday, May 12, 2013
Dubai: Luxury retailer Chalhoub Group is taking a 30 per cent loss in Egypt and 85 per cent in Syria following the Arab Spring but will focus on keeping business there afloat, the company’s chief executive told Gulf News.
“Our philosophy is not to freak out or abandon our resources and team. We will focus on business continuity, not stupidly, but we hope that time will repair the issues or with time we’ll reduce operations,” Patrick Chalhoub, chief executive of the Chalhoub Group, whose parents founded the company.
The group has already withdrawn from Iran and Yemen following stricter sanctions and political instability respectively.
Chalhoub Group, which has 450 retail outlets in 14 countries in the Middle East, is focusing on its fastest growing regional markets topped by UAE, Saudi Arabia, Kuwait and Qatar.
It is investing in 150 stores this year, with 50 in UAE, 50 in Saudi Arabia and the remaining stores around the region, Chalhoub said.
Last year, the company recorded 18 per cent growth in the Middle East and 20 per cent in the UAE as the luxury market “rebounded” from the financial crisis, he said.
In 2013, Chalhoub Group is targeting growth levels of 22 per cent in the Middle East. “The local and GCC market is growing vastly, especially the tourist market in the UAE.”
Asked if the company was targeting new markets for its retail stores, Chalhoub said they are looking at some new destinations such as Erbil, Iraq. However, the main focus is on developing existing markets that already have a strong potential for growth such as Saudi Arabia with its young population, UAE with its ambitious retail plans and Egypt where it will open new stores in the upcoming Cairo Festival City.
Asked if the company will focus on international brand names or its own concept stores, Chalhoub said the choice depends on the maturity of the market. In mature markets they will focus on franchise brands, which tend to attract tourists and are more successful in countries like the UAE. In secondary cities or community malls, the focus will be on multi-brand stores, including Chalhoub’s own concept stores.
As a supplier to various duty-free outlets and airlines, Chalhoub saw its travel retail business contribute about seven to eight per cent of its total revenues. It grew 18 per cent in travel retail last year due to growing transit passengers and airport expansions in Dubai and Qatar but saw a drop in business in Egypt and Syria duty-free stores, he said.
Created in 1955 by husband-and-wife team Michel and Widad Chalhoub with the first Christofle boutique in Damascus, the group today deals with major international brands. It opened the Level Shoe District in Dubai Mall last year, children’s luxury clothing store Katakeet, its beauty concept store Faces, luxury gifts store Tanagra, an alliance with Saks Fifth Avenue and partnerships with Christian Dior, Louis Vuitton and others.
By Deena Kamel Yousef Staff Reporter
Gulf News 2013. All rights reserved.
