By Tamara Walid
President of Dubai luxury retailer says financial crisis continues to impact stores.
Dubai luxury retailer Bin Hendi Enterprises expects retail sales in the emirate to drop by up to 30 percent this summer versus last year as the financial crisis continues to hurt stores."25 percent to 30 this summer, compared to last year," Mohi bin Hendi, who heads Bin Hendi Enterprises, told Reuters in response to a question. He did not give details of his company's retail sales.
Despite the gloomy outlook, Bin Hendi, which distributes luxury brands such as Brioni, Calvin Klein, GF Ferre and Hugo Boss, plans to expand into Gulf Arab countries and bring four new high-end European brands to the market this year.
"My strategy is to expand in the downturn so that when the market picks up we're going to be there," Bin Hendi said in an interview.
Bin Hendi Enterprises is in talks with mall owners and developers to increase its retail outlets in markets such as Qatar, Bahrain, Kuwait and Abu Dhabi.
"Qatar is a good emerging market with a lot of demand for retail," Bin Hendi said, adding the company was in initial negotiations with mall builders and planned to enter that market at the beginning of next year.
The wider Gulf region experienced an economic boom in the six years to 2008, and luxury retailers expanded quickly into Dubai hoping to capture sales among wealthy Gulf Arabs and tourists to the most popular Arab destination after Egypt.
Dubai's retail sector was hard hit as the financial crisis crimped spending habits and the number of tourists to the emirate fell. Retail, which generates a third of Dubai's gross domestic product, has slowed markedly.
Bin Hendi closed an entire avenue of its stores in Deira City Centre, one of Dubai's most popular malls, this year, due to the absence of high-end customers.
"We closed down the shops because it did not make financial sense for us," Bin Hendi said. "We cannot sustain it any more because the clients are not there...if there are no sales, where will the rent come from?"
Mall shops in Dubai may see tougher times and even closure if landlords continue to stall on renegotiating high rents, luxury retailer Rivoli Group told Reuters in June.
Bin Hendi said mall owners had to be "more accommodating to their clients" and "the smart ones will bring rent prices down" if they wanted to avoid store closures.
Bin Hendi said he had no plans to tap into the mid-market segment, despite the luxury sector taking a hit.
"We are not going to go down and start selling cheaper products," he said. (Reuters)
Mabrook Mr Bin Hendi! As a business owner I felt a wave of confidence after reading this PR. Why? Because this statement reflects the reality we see around us every day. We need more business leaders like him to stand up and tell us how it is. Thank you Mr Bin Hendi!
Someone not afraid to tell the truth! A few more Bin Hendis and I might start believing that we are on the right track again. It's so long since I saw something this honest, it brought a tear to my eye
Great confidence. Real Dubai style business. Invest when the rates are lower. Be careful to calculate ALL risk factors. Just leave some buffer in case the recession drags on and do not commit every dime/fil to the expansion. Regards, Khawar
The first time i am reading an honest statement of the economical situation, did not think I will live to experience this, my sincere respect to Mr Bin Hendi, honest persons like this gentlemen will bring Dubai forward, not those fortune tellers which we see regularly on this issues. Well done Mr Bin Hendi
Dear Mr. Bin Hendi, I'm impressed by your frank admittance of the retail situation in the UAE. Being an ex-resident of the country, it pained me to note how hard the retail business was hit and yet the media only spoke hope when they was nothing to support that theory. Acceptance and action is most essential for successful businesses and economies to fix the situation and rise out of the ashes rather than painting a LIE and trying to con everyone into believing it. We're all not blind! Vineet