The jewel in the crown

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Damas CEO Tawhid Abdullah at an event to announce a new jewellery range.

Following the listing of his company on the DIFX, Damas CEO Tawhid Abdullah talks about what lies ahead for the jewellery giant.

It has been a very good morning for Tawhid Abdullah. He has arrived fresh from a press conference announcing Damas's listing on the DIFX - a move that raised US$270.6million to fund the company's expansion plans.

Speaking to the audience of journalists, he revealed the company's soaring profits - up 20% year-on-year with first quarter sales of US$305million and a net income of US$18.9million.

It is these numbers that inspired regional institutional investors to snap up the company's 270.6 millon shares at US$1 each.

But after announcing the good news and completing the television interview, Abdullah admits that behind the scenes the company wasn't always so confident about launching its IPO, and that it faced a difficult decision over whether to list locally or on the international markets.

"I can't deny there has been a lot of conflict about whether to go dual listing or listing outside the UAE," he explains. "But the decision from the board of directors was that we are a long-term visionary board and we would like to be in the market that is closer to us. And this will help us to have a better view of the industry worldwide."

One of the reasons for the company's trepidation over launching its IPO and throwing itself open to the scrutiny of institutional investors was that this is a big step for what has been a family firm since it was first set up in 1907.

The company sells not only its own gold and diamond jewellery but also products from companies such as Tiffany & Co and Links of London.

While it has certainly enjoyed spectacular success - with a network of 438 stores across the Middle East, South East Asia, Europe and North Africa - Abdullah says there is still work to be done when it comes to establishing the company's corporate structure with an independent board of directors.

To this end the company is making sweeping changes to its management structure, including the appointment of three independent directors to sit on its board and advise on corporate governance.

"This is a very healthy step that the company has decided to take," Abdullah says firmly.

"We'll have a broader board of directors, with three independent directors joining us, who will bring with them many years of business experience that we can all benefit from."

"I would recommend widening the board of directors to any other Gulf firm, because it is a step that moves you towards being more independent and achieving better corporate governance."

With this new structure in place, the company intends to put its expansion plans into action.

It hopes to open a massive 131 stores this year and a further 100 in 2009 to cash in on the Middle East and Indian economic booms.

"The major expansion will be in Saudi Arabia, then India from next year onwards," Abdullah says.

"We aim to run 50% of our business in the UAE and 50% outside it."

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