Subcontinent targeted as part of ambitious roll of retail business
Dubai, November 11, 2004: Top retail chain Spinneys today took the first step towards expanding the group across the Middle East, North Africa and Indian subcontinent with the announcement of its first Egyptian outlet at the City Stars Centre in Cairo.
A 15 year lease agreement was signed today between Spinneys Egypt Ltd, (which is part of the group which owns the Spinneys brand worldwide, own-label sales and Spinneys Holding Lebanon), and Golden Pyramids Plaza, the owners of the 800,000 square meter built up area shopping cum recreation centre. The Spinneys outlet will be housed in an area totaling 13,500 square meters.
Today's launch of Spinneys Egypt is the opening shot in an ambitious campaign that will transform the 80-year-old retailer into a Pan-Arab, South Asia giant. In quick succession, further outlets will follow in Algeria, Iran, Syria, Jordan and Pakistan as the group rolls out the brand. Spinneys is also committed to a two-tier strategy and its outward expansion is being balanced by consolidation in existing markets such as Lebanon, where it is adding two outlets to the current five in operation.
The retailing sector in general and the supermarket sector in particular present a tremendous opportunity in the region. Retail food sales in Lebanon, the UAE, Saudi Arabia, Egypt, Bahrain, Oman and Qatar amounted to $28.6 billion in 2002. Of these sales less than 10 per cent were channeled through supermarkets, whereas more then 50 per cent of them are channeled through supermarkets in mature economies.
Sheikh Abdulrahman Al Turki, Chairman of Abraaj Capital, which owns a significant stake in the retailer, said there is a solid basis to support the group's expansion. "With sales turnover crossing the $100 million mark in Spinneys Lebanon, we have a platform from which to launch our expansion across MENA and the subcontinent.
"There are clear opportunities arising from the regions rapidly increasing young population and a noticeable shift in consumers' attitude towards shopping. We intend to seize those opportunities and open outlets where customers can benefit from them.
"We intend to capitalise on Spinneys' strengths in marketing to build a strong retail presence and draw on the changed requirements of customers to transform their experience of shopping. This will act as a further driver of growth in the sector," added Sheikh Al Turki.
Sheikh Abdulrahman Sharbatly, Chairman of Golden Pyramids, said that he was delighted to have Spinneys opening up in Egypt and at the Stars Centre.
"We look forward to a very long association with Spinneys as we develop the Stars Centre, which is set to be one of the largest shopping complexes in Africa and Asia and certainly amongst the most acclaimed and beautiful in the region.
"We believe that in the future Egypt will play a central role, in the international scene. To us, Cairo symbolises this promise as it transforms itself into a vital, progressive and increasingly cosmopolitan city. It is in response to this transformation that Golden Pyramids has geared its investment towards a project that will be an exemplary concept in this great city," he added.
Michael Wright, General Manager Spinneys Lebanon, who spearheaded the growth of Spinneys in the Levant and built that business into the largest retailer in Lebanon, has been given the task of masterminding the Group's expansion and business development has recently been promoted to Managing Director of Spinneys Holdings.
Spinneys Holdings, which owns the worldwide rights to the Spinneys brand and trademark, and grants licenses to individual jurisdictions, also announced that it has reconstituted its board recently. The new board is chaired by Mr. Arif Naqvi, Executive Vice-chairman & CEO of Abraaj Capital, Mr. Hussein J. Al Nowais, Chairman, Emirates Holdings, Sheikh Nawaf Nasser Bin Khaled Al Thani, President of the NBKS Automobile Group and Chairman of Doha Insurance Company, Mr. Bassam Ghais, Managing Director of Al Jaber Energy Services, Dr. Ahmad A. Al Malik, Mr. Waqar Siddique, CEO of the Cupola Group, Mr. Michael Wright, Managing Director of Spinneys Holdings Limited, Mr. Simon Davies, Executive Director and CFO Abraaj Capital, Mr. Humayun Shahryar, Executive Director Abraaj Capital and Mr. Imtiaz Hydari, Senior Advisor of Abraaj Capital.
Arif Naqvi, Chairman of Spinneys Holdings and the Chief Executive of Abraaj Capital, said that Spinneys has established a track record for turning shopping into entertainment.
"It is no longer merely a matter of utility for the people who use our outlets. We have proved in Lebanon and elsewhere that we have a winning formula, one that appeals to our customers, who come to us not just for goods but for the whole shopping experience.
"We have strengths in marketing and promotion as well as our core retail offering. We will leverage all of these to make sure that every new Spinneys we open offers value that its customers cannot find anywhere else," he added.
Michael Wright said that the process of rebranding has begun for the retailer as it contemplates a new future as a Pan-Arab operator. Earlier this year it enhanced its corporate branding with a fresh oval green logo and the slogan "Why Pay More?"
"Our retailing strategy for Egypt and the region is supported by innovative shopping promotions aimed at consolidating the group's image as a world-class retail major offering both premium quality and value for money. One feature that customers will notice is that there will be more own label products on our shelves, which will not only ensure quality but also add value for money," he pointed out.
-Ends-
Notes for editorsStars Centre, the Retail/Leisure component of Citystars Integrated Project (incorporating luxury apartments, offices, Intercontinental and Holiday Inn hotels) Heliopolis Cairo presents excellent opportunities for shopping, leisure and entertainment. Stars Centre offers a well planned tenant mix anchored by international operators. As well as Spinneys hypermarket there is provision for departmental stores, variety stores, furniture stores, toy stores and a gold souk and many other retailers.
Stars Centre provides a safe recreational environment of a cineplex of up to 16 screens, food courts, cafes, restaurants, theme parks and arcades.
About ABRAAJ Capital
ABRAAJ Capital is a premiere investment firm that specialises in Private Equity Buyout investments in the Middle East and North Africa (MENA) region. UAE-based, the firm also pursues follow-on investment opportunities in South Asia. The team has brought together some of the most compelling and successful investment track records in leveraged acquisitions across the Middle East, it has completed close to US$500 million in private equity transactions, generating an internal rate of return of over 35 percent over a nine-year period. For more information, visit www.ABRAAJ.com
For further information please contact:
Fakher Daghestani / Utpal Bhattacharya
ASDA'A Public Relations
Dubai,
UAE
Tel: + 9714 3344550
Fax: + 9714 3344556
u.bhattacharya@asdaa.com
© Press Release 2004
