Concept plans to open more showrooms in the UAE, China and Egypt
Home Centre, one of the flagship concepts of Landmark Group and the largest retailer of furniture, furnishings and home ware in the UAE, has been growing steadily since the opening of its first store in 1995 on Al Qasimiyah Road in Sharjah.
Now the concept is planning to open at least four more large format showrooms in the country by 2009, according to Deepak Goyal, deputy general manager of the company.
"As of now, we are planning to open four more showrooms in the UAE. By this month end, we will open our next showroom at Liwa Centre in Abu Dhabi. In the third quarter of 2008, we will open another big showroom at Oasis Centre, and in 2009, we will have two more new outlets coming up in the Mall of Arabia and Mirdif City Centre," he told The Business Weekly.
Home Centre now has ten showrooms in the UAE and 53 stores spread across the Gulf, Jordan and India and covers 1.3 million square feet of retail space. The concept opened its latest outlet that covers an area of 65,000 square feet at Sahara Centre in September this year.
Opening of each new outlet costs Dh7 million to Dh8 million to the group, Goyal said, adding total retail area covered by Home Centre in the UAE will cross 750,000 square feet by 2010. He said the group is not planning to open smaller showrooms because "we can not offer all the options available with us through a small showroom."
Goyal is happy with the progress Home Centre has been making since its inception. The concept has been growing at a steady rate of 20 to 25 per cent since it started operations. He says maintaining the quality of products and services to customers is more important than just increasing the growth rate of the company.
"We don't want to compromise on customer service standards and all. If you target a growth rate of 50 per cent, customers will suffer," he said, adding "we provide all our customers free home delivery of the products they purchase from us, with no questions asked. We bear the cost of it on our account."
Most of the competitors of the company charge customers the cost of delivery and assembly of the furniture bought from them, he said.
The company has an ambitious target and is constantly striving to achieve that. "Now the turnover of the concept is nearing Dh1.5 billion and our target is to cross that figure by next year," Goyal said.
Home Centre imports finished and unfinished products mainly from far eastern markets like China, Malaysia and Indonesia.
Asked whether the conecept plans any diversification of business, Goyal said, "We, as Home Centre, have no plans to diversify. However, the group may be planning diversifications."
Talking about entering new countries, he said, "We will open our showroom in China by the second half of 2008 and in Egypt we will open in 2009."
Goyal said liquidity crunch is the major challenge this market is facing now. "A lot of money is being diverted into property sector. Then, the second challenge is inflation."
"Earlier, it used to be the favourite pass time for customers to go for shopping, but, not any more. People have become very careful in their spending patterns," he said.
However, there is no such issue that the business is going down. "But yes, the market is fairly new. And it is developing at a very fast pace. By 2010, we can say that we are doing business in a market that is very matured."
Goyal continued, "I don't know how many end users are getting into the property market. I believe most of the buyers are investors. We can judge our market only when the end users start using these properties."
Landmark Group has more than 17,000 employees, of which some 3,000, consisting of 21 nationalities, are with Home Centre.
In India, Home Centre started its operations only one and a half years ago. However, now the concept has presence in Gurgaon, Noida, Mumbai, Pune, Chennai, Bangalore and Hyderabad. "We have a good spread in North and South. Some more stores are coming up in big cities and, then we will get into smaller cities," Goyal said.
Asked what he thinks about the business prospects, Goyal said the demand would be huge, at least for the next three to five years. "Till the year 2010, there are at least 200,000 bed rooms to be furnished," he said, adding, "I am talking only about bedrooms and the projects that are already announced."
Goyal is not worried about the competition in the market. "We don't bother about competition at all. The more the competition, the better the quality of products and services the customers will get; and obviously, the pricing also will improve."
About maintaining the quality of products, Goyal said, "We have a quality control team for each and every supplier. We do inspections at the stage of even when the raw material is procured, going into the production process, till the final product is handed over to the shipping agent."
"We also have about 15 staff members just for designing furniture and house hold items," he added.
Goyal said the drop in the value of US dollar has not affected Home Centre's bottom lines, because "our exports are mainly into GCC markets and we don't have much dollar payments to receive on make."
By Pradeep Palat
© The Business Weekly 2007
