Softly-spoken Indian businessman Firoz Merchant is a self-made millionaire, ranked number 30 on the recent Arabian Business 50 Richest Indians List, with a wealth estimated at around $440m. This is a far cry from having to leave school at the age of 11 because his parents could not afford the fees and living in a cramped Mumbai bedroom with his eight siblings.
Fast forward to Dubai and he now owns a gold retail conglomerate that is one of the biggest names in the industry and, in the midst of a challenging retail sector, has just announced multi-million-dollar expansion plans, is set to create 2,000 new jobs and is aiming to enter the hospitality sector.
But we’ll get back to that later. While the rags-to-riches story is a common one across the Indian community in Dubai, what really sets Merchant apart from the rest are his phenomenal and very personal philanthropic ventures. Starting in 2011, he has helped repatriate around 4,000 insolvent prisoners from Dubai jails, forking out more than AED3.5m ($952,914) to pay off their debts.
“I believe we have forgotten about this area. Nobody looks at this area,” he says when I ask him why he goes personally to the cells to help these forgotten men. “My philosophy is simple. When I came from my country to the host country I didn’t just come for the money. How can I pay back the country? Saying thanks is not enough. How good a human are you? You have to prove it.
“I was in Sharjah Central Jail where I had a meeting with the deputy director and we discussed how to take this subject forward. When the population grows the crime grows and, when crime grows, there are more prisoners. In prison there are good people and bad, which we cannot judge, it is subject to the judiciary. But, at the end of the day, they need support. Today we signed up for AED1.2m to support the release of prisoners.
“When I go there the director general gave me the list of many people who are inside because of the loan [defaults]... if they do not pay the money they do not get out. Out of the ten or 15 files they selected two files, which were about AED150,000, one AED100,000 and another AED50,000. They said these two persons are very well behaved and we should give them the chance to make it in this world so I said I was ready to support them.”
Merchant then recalls the last time he came face-to-face with some of the men whose lives he is helping to get back on track: “So they called the two prisoners as I wanted to meet them. One was Pakistani and one was Indian. Both came in front of me. When I saw them it looked like they had changed. I asked them about their regret and did they believe what they did was wrong but needed a chance in this world to change themselves and support their families.
“The Pakistani said he had three children, parents, a sister and about ten or 12 people who depended on him. He has been in prison about six and a half years and he doesn’t know how his family is surviving. I said ‘if you were released what would you do?’ He said he would go home and work hard and feed his family.
“So I said to the Indian ‘what is your plan?’ He said he came to Dubai 22 days before he got married... he came here seven years ago and he hasn’t seen his wife and now he doesn’t know what has happened. He was from Kerala.”
Merchant’s own story was also a difficult one at the start. While he thankfully did not end up in jail, he knows what it means to struggle to make it in an unknown market like Dubai. After helping run the family business in Mumbai, he first came to Dubai on honeymoon back in 1981, with the plan to head back home and, like a dutiful son, take over the reins of his father’s real estate business. But during his holiday, he toured the gold souks in Deira and was struck by a flash of inspiration.
“During my honeymoon in Dubai I became fascinated by the gold souk in Deira; I began to understand why I did not want to enter my father’s real estate business. In fact, I spent most of my time at the gold souk. My new wife was very upset with me. She said ‘did you come here for the business or the honeymoon?’”
Returning to Mumbai, Merchant announced to his surprised parents he was not going into the family business and was moving into unchartered waters in Dubai. “I said to my father, ‘I don’t really understand it, but I’m totally convinced I have to go into the gold market’. My father laughed at me. My whole family laughed at me. They thought I was crazy,” he recalls.
However, the gamble certainly paid off. He started in 1989 with no capital, buying and selling gold bars for just AED5 in profit at the start. Within three years, he had enough money saved up to establish Pure Gold Group, which is now a $1bn retail phenomenon which comprises Pure Gold Jewellers, La Moda Sunglasses, Arianna and Pure Gold Properties. Today, two decades later, it has 125 outlets in 13 countries, including the GCC, Sri Lanka, Jordan, France, Singapore and India, a staff pool of over 3,500 employees and factories in China and India.
“Dubai always has given me a feeling like a home country. I came here in 1980 and I established my business in 1989. When I landed in this country I did not feel like I was a stranger. From the day I landed it has given me a lot of confidence. When I came I came because of the confidence here and the government and what you can learn in the region.”
Capitalising on this, Merchant has plans to invest AED500m bringing his network of stores up to 250 by 2020, creating an additional 2,000 new jobs. Around AED400m will be invested in new Pure Gold stores and an additional AED100m in the La Moda sunglasses brand, increasing its number of stores from 15 to 50 by 2020 across the region.
“It’s very simple... The strong customer base started the journey from Dubai and then into 13 countries. We want to go now into new countries. At the same time Dubai is a tourist destination so where we have a presence it helps us when they come here as a tourist and when they see the company they feel they are in the right place. We believe in learning and being the best in terms of customer experience, price and product. We are putting in 100 percent effort,” he says of his vision.
In order to develop the network and global footprint, Merchant says he is keen to do it on his terms and not go down the franchising route: “We don’t do franchising. We have a capacity to run our own business at our own financial strength and are very comfortable.”
That said, he hasn’t ruled out mergers or acquisitions in order to propel the brand forward. “Acquisitions? Everything is subject to what is available in the market at the right price. We have to see the company price and size. We are open-minded businessmen. You need to learn and get opportunities wherever. I am very happy and satisfied with my business.”
In August last year, Pure Gold Group announced that its Arianna boutique brand had opened its first international brand in Paris. Located in the Peninsula Hotel, the outlet features jewellery and accessories designed by the likes of Gucci, Roberto Coin, Moraglione, Annamaria Cammilli and Leo Pizzo. The boutique store also features exquisite jewellery designs by Arianna’s in-house design team.
Nearly a year on, Merchant says it is too soon to determine whether the European venture has been a success but he is determined to push ahead with expansion into the challenging market.
“The euro is suffering so it will take time to settle down. Currently we are not in a position to say if it is a success but we will not give up and we will work hard. It will take time and we will move into the rest of Europe, to Italy, Germany and [the] rest of France.”
Dubai this year retained its position as the second most important international shopping destination globally for the fourth consecutive year, closely behind London, according to a new report by real estate consultancy firm CBRE. The 2015 edition of ‘How Global is the Business of Retail?’ showed that Dubai has a presence of 55.7 percent of international retailers followed by Shanghai with 53.4 percent.
Despite the good news, some retailers have pointed to the decline in the Russian tourist market and falling retail sales as a worrying sign in the short term, something Merchant agrees with.
“The current situation is a little bit more challenging. The retail and hospitality business is suffering. We have lost the business of approximately 20 percent compared to last year. There are many factors, one is the Russians, the tourism from the euro areas, as for most of the countries it is very expensive. The third thing is oil, which has dropped about 50 percent, which is a very big number. We are all in the same boat... Everybody is struggling,” he says.
Despite these short-term concerns, Merchant’s long-term plan to 2020 coincides with Dubai’s 50th anniversary and its hosting of the World Expo event. In addition to more retail stores, he is also considering launching new brands and even a move into the hospitality sector.
“Certainly, we are looking for many opportunities in the retail business. Our team[s] are working and looking forward to getting something which we can bring here... Dubai is a growing city.
“In 2020 for the Expo the city needs more hotels. So we will also consider opening one or two hotels in Dubai in 2016, 2017 or 2018, before two years... We will go with a four-star or five-star. Not Pure Gold, we don’t want to go with our own name... Something that is a chain we can bring here.” So look forward to Merchant unveiling his hotel in Dubai in the not-too-distant future.
As we went to press, gold hit an 11-week low, heading for a third straight weekly slide, as the dollar rallied after better-than-expected US employment data bolstered prospects for an interest rate increase this year.
While Merchant works in the gold sector day-to-day, even he believes it’s difficult to get a handle on where the price will settle. “It is a very simple thing. The world still is facing an economic problem. Gold is the one thing that is difficult to say which way the market will go.... [but] people still invest in gold.”
While the price of gold may be hard to judge, one thing for sure is Merchant’s philanthropic endeavours and contribution to helping those in Dubai’s prisoners will likely be his lasting legacy and his biggest impact on his golden time in the UAE.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.