i2-CompuMe to manage Virgin Megastore IT sales

Middle East retailer i2-CompuMe will manage the IT and mobile phone departments of Virgin Megastore in the region after taking over the contract from previous alliance partner Intertel Electronics.

Under the Virgin umbrella, i2 is set to handle stocking, marketing, vendor relations and merchandising for all mobile and IT hardware products.

The agreement applies to 14 Virgin Megastore outlets operated by Middle East holding company Azadea Group, including five in the UAE and others based in Bahrain, Egypt, Qatar, Kuwait and Jordan.

“We have been bidding on Virgin since the beginning when they opened and have finally come to an agreement to take over the contract from the previous concessionaire,” confirmed Dikran Tchablakian, senior VP for retail at i2, who added that the management of IT and telecoms was becoming an increasingly important aspect of Virgin’s business as it looked to support core CD and DVD sales.

“Virgin needed a specialised company who understands retail to come and take over and grow that business,” he said.

Tchablakian did not disclose the company’s sales expectations, but said it anticipated a “very high” return given that Virgin currently allocates between 10% to 15% of its floor area to IT and mobile products.

He said there was a strong opportunity for the company to capitalise on segments of the market that were not necessarily covered by i2 or CompuMe, while the contract would offer the sort of purchasing power that would otherwise only have been attainable through rapid store expansion.

“In order to be able to talk with the vendors on an equal footing you need to talk volume,” said Tchablakian. “This will give us more buying power and double our numbers, which will give us better leverage in front of suppliers. Not only will that help Virgin, but it will help the existing CompuMe and i2 stores so it is an important step for us.”

i2 has already begun transforming the IT and mobile areas of Virgin stores in Kuwait, Jordan and Dubai’s Mercato Mall, with plans to be fully operational in all 14 stores before the beginning of September. It expects the flagship Mall of the Emirates outlet to be ready by August.

Tchablakian said the ‘concessionaire’ model — where a third party manages specific sections of an independent store — was common in the Middle East retail channel.

“We have a similar operation in Saudi Arabia where we do the merchandising and stocking for mobiles at Emax, while in Egypt we do it for Omar Effendi, the biggest department store chain. Here in Dubai we provide the mobile devices that are sold at some of the Etisalat outlets and in Kuwait we have started with Viva, the SDC company,” said Tchablakian.

Virgin Megastore could not be reached for comment.

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