Sitting in a large colourful office, surround by film posters, comic book memorabilia and superhero models, Mohammed Khammas is proudly showing off a picture taken with Ed Sheeran at his Autism Rocks Arena gig last November.
It was his events company 117 Live that organised the show, which took place at the stadium he owns, along with the surrounding Outlet Mall complex that he had built.
“I gifted him an oud,” Khammas says of the evening. “He loved it, though when he tried to play it he sucked. Though from what I’m hearing from his team, he’s been practising since then.”
Khammas is a passionate fan of the music business, and hopes to discuss “co-productions” with Sheeran at some stage in the future. “We’re entering the whole value chain across the music industry. But we’re pacing ourselves; I don’t want to overburden my team.”
It quickly becomes clear that the sprawling conglomerate he runs does indeed have plenty to keep his team busy without further distractions. And though his office might look like a fanboy’s shrine to pop culture, the company Khammas runs is a seriously big organisation.
Al Ahli Holding Group (AAHG) is a four-decade old multi-diversified international conglomerate that his father, Nasser Khammas, built from scratch.
Activities range from real estate to construction, engineering, mining and infrastructure, retail and trading, technology and logistics, lifestyle and fitness, entertainment and hospitality.
Since Khammas junior entered the business in 1999, he has diversified it considerably, opening Dubai Outlet Mall, buying the franchise rights to US-based Gold’s Gym and licenses to publish Marvel, Warner Bros and DC Comics comic books.
He established Al Ahli Plastics, opened Comicave, the world’s largest comic store at Dubai Outlet Mall, and launched a Singapore-based company, also with Comicave Studios and Universal Events, to host events and conventions. He also has alliances with Fox Studios, Marvel-Disney, Sony Pictures and Warner Bros.
To run all this, AAHG has 9,000 employees, and is based in the UAE with representative offices across 20 countries.
So, when Khammas says he doesn’t want to overburden his team, he is not exaggerating. And it means he occasionally has to reign in his enthusiasm to reshape not only his own family empire, but the future of commerce more generally.
Because, as it turns out from a wide-ranging conversation at the company headquarters next to Outlet Mall, Khammas has an extremely focused vision for how these seemingly disparate businesses connect with each other, and the customers he wants to attract.
When Khammas took over from his father as CEO in 2006, he could have run it as any other well-run, traditional family firm.
Having studied international business at the University of Denver and geophysical engineering at the Colorado School of Mines (as well as political science at California State), he was more than prepared to oversee Al Ahli’s extensive mining and industrial operations around the world. But he wanted to do much more than that.
“We wanted to be part of cultivating and then capitalising on human behaviour, so we needed to be in businesses that were able to read and register that behaviour in a variety of domains,” he says of his desire to know what makes people tick.
After studying various markets, his first move was to open Outlet Mall in 2007, which he describes as “a habit changing retail environment… it’s a price-sensitive option that still delivers the quality that is important for our market.”
All the other ventures that have followed – in music, fitness, events and pop culture partnerships – “deal mostly with the psychological effects on the individual and asking how you cater to that clientele and change fast enough to be in line with what they want.”
He uses the example of the Gold’s Gym franchise he acquired in 2011 to demonstrate how this approach works in practice.
“People today won’t spend where they don’t see value,” he says of the market.
For this reason, members get first access to concert tickets, invites to meet-and-greets, and the chance to participate in Al Ahli’s movie investments, with some members having been flown to Hollywood for red carpet events.
By changing the value proposition with initiatives like this, Gold’s Gym has raised its fees by 20 to 30 percent while witnessing faster growth than in previous years.
“It becomes a lifestyle choice,” says Khammas of the strategy.
“We put together experiences that tap into your interests. It could be fitness, music, comedy or live events. When you combine this for our retailers and shoppers at Outlet Mall, and for our Gold’s Gym members, it gives everyone value and you’re not competing on price.”
It helps that Khammas launched his own events company, 117 Live, in 2015, as well as acquiring another events company in the US and Singapore that arranges worldwide gigs and conventions such as Asia Pop Comicon in Manila.
“My clients are no longer location-based just in Dubai, so we need these out-of-the-box solutions to enable a significant spillover into our other businesses.”
Even more crucially, he now has the tools to help him gauge what events are likely to succeed. In 2015, he acquired theAudience, one of the world’s largest publishers of social and digital content, with a global reach of over one billion people.
Based in LA and co-founded by technology entrepreneur Oliver Luckett, founding Facebook president Sean Parker, and Ari Emanuel, co-CEO of William Morris Endeavor, Khammas describes theAudience as being the “connective tissue” that brings his varied businesses together.
Its cutting-edge social consulting, publishing and influencer activations give Khammas a platform upon which he can build digital campaigns to reach out directly to audiences and understand their interests.
To this end he also set up Rethink Technologies in 2013 which helps in data collection and analysis for Al Ahli and other businesses.
These techniques have yielded some fascinating insights. For instance, Khammas discovered 68,000 fans of Korean music in the UAE, hence 117 Live this month hosted a K-Pop festival at Autism Rocks.
“We throw in a topic on social media and listen to the banter to see who’s interested,” he says of these endeavours. “I wanted to know what our potential audience was thinking, where they were going, and what they like and dislike. And I needed a vehicle to be able to absorb all of that information.”
He says he is often surprised at the results.
“We wanted to put on a comedy show and our research repeatedly showed that [Mexican-American] Gabriel Iglesias was first choice above more established acts like Kevin Hart. I really couldn’t see it working but we ended up selling out both nights. It proves that by listening carefully you can design a business around understanding what people want.”
Khammas summarises his approach by admitting that “the smartest thing we ever did was to acknowledge our ignorance. But we needed to invest in many different fields in order for me to be able to understand and please you as a customer. And that’s ultimately the end goal. If you’re not happy with my services I will lose you to someone else.”
It would be easy to assume that Al Ahli’s traditional industrial ventures are the real revenue drivers that allow Khammas to pursue his pet projects, but that’s not the case.
In fact, he says that the industrial group now accounts for just 40 percent of Al Ahli revenues, but is quick to point out that these sectors have all been growing and performing well.
As such he’s targeting 10 percent growth this year for the group, but expects retail to climb a lot higher on the back of a planned extension of Outlet Mall that will see it more than double in size from its current 1.5 million sq ft.
He says he could have done it years ago but preferred to wait and judge the market on results.
And he has a warning for other operators who build without a strategy.
“Within the same stretch of highway near here I run into seven malls, but I can only shop in one of them. So the distribution of the populace is going to have to be taken as a factor. I understand that developers gravitate towards what seems to make the most money, but it needs to be a sustainable business over the long run.”
Khammas is forthright in his views on the need for stainable growth. He follows his assessment on the retail environment with a shot across the bows at landlords who seek to maximise their rental returns.
“We need to liberate ourselves from overburdening residents on their real estate costs, and allow that income to disseminate within the wider economy.”
He alludes to long-term plans to address the issue, though won’t be drawn on the specifics beyond saying:
“I don’t want to squeeze the life out of the people in one of my buildings when I could allow them to spend across four or five of my different projects. And that needs to be a conscious decision; it can’t just be an after-effect of the economic cycle.
"That rent inflation gets passed on to companies who will increase the cost of their services and you create a vicious cycle. We are actively involved in keeping cash in your pocket so you can spend it where you like. This sometimes leads to questions about my sanity within the group, but that’s what we’re developing right now.”
The conversation on sustainable growth leads him to talk about another project that has yet to be officially announced. Khammas has plans for an initiative that will help the start-up economy of Dubai, because he wants to give back to the city (he has an entire website, csralahligroup.com, devoted to Al Alhli’s CSR initiatives) and also to foster future creativity within his own organisation.
“I’m able to understand certain things at this moment, I’m able to travel. At some point I may not be able to do so and I will need that injection of fresh blood from other people.”
When asked what his father, Nasser Khammas, who is still chairman of Al Ahli, thinks of his son’s business strategy, Khammas smiles.
“He has been patient, I will say that much. He has not always been a fan of our initiatives but he’s always been kind enough to allow us to proceed. He treats this as a partnership.”
As to whether father or son has considered an IPO of any parts of the business, Khammas expresses doubts that such a move would add value.
“We’ve toyed around with the idea but shied away from it. What we do is so unique that any change in ideology may set us on the wrong trajectory. We want to control the environment that we’ve built.”
And in any case, he’s having too much fun being able to set his own course, at least for now. “New ideas are born because they are needed, and life’s too short not to try them out. You always have to keep your eyes on everything out there. We always keep learning; we stay on our toes.”
He says that 2018 is one of the most optimistic years he’s had in the past ten years.
“I’m working on projects and ideas that are keeping me awake at night; I’ve literally had an average of three hours’ sleep every night for the past four months. It’s been crazy, but also very enjoyable.”
In 2015 Al Ahli Holding Group signed a global licensing deal for its 20th Century Fox World theme parks. The first one was to be built in Dubai adjacent to Outlet Mall, but work has yet to start on the project.
“We’ve realised that there’s now a serious supply of theme parks in Dubai,” says Khammas. “The operators have done an amazing job, but right now people should stay away from developing other ones for the foreseeable future.”
In recent years, Dubai Parks and Resorts has built Bollywood, Legoland, MotionGate, and Riverland; IMG World has launched, and Six Flags is expected to open in late 2019.
In Abu Dhabi there is a Ferrari World, with Warner Bros Abu Dhabi also opening this summer.
Al Ahli’s events company 117 Live came under fire last year for traffic issues at its shows.
Khammas says of those problems: “It’s a combination of two things: a big event in Dubai will always cause traffic because people think they can leave home half an hour before the concert starts. Secondly, there were logistical challenges that the RTA has addressed.
"But ultimately, when you have 35,000 people turning up for a show it’s never easy, and it would take time anywhere in the world. We’re building additional facilities outside of the venue so people can come and enjoy the afternoon before the concert.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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.