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Sun 26 May 2013 12:52 PM

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Growing up fast: The JustKidding story

When JustKidding signed a franchise deal with investors AMZ earlier this year, it marked the next chapter in the company’s story of growth. Founder Annemarie Retera spoke to StartUp about how and why her business made this big step, and what it means for JustKidding’s future

Growing up fast: The JustKidding story

Anybody who has brought up a baby will know what it’s like. The constant planning during pregnancy to ensure you have all the items you need when your child is born; the mad dashes to the shops to buy extra food, nappies and wet wipes; the never-ending list of things you need to buy as your baby learns to crawl, walk and talk.

It’s a joyous time, but potentially a logistical nightmare too. Which is why shops such as JustKidding have been such a welcome arrival in the region.

A haven for parents in Dubai, JustKidding launched in 2006 offering a range of premium baby products from car seats and strollers to baths and bibs, and from cots and body suits to toys and trikes.

From its first store in Al Quoz, the company later moved to the Gold and Diamond Park near Mall of the Emirates, and a year later opened its flagship store on Sheikh Zayed Road.

And now, thanks to a multimillion dirham franchise deal, the company will be spreading throughout the region, with seven new stores opening in the coming months, before moving into Saudi Arabia.

The brains behind the operation are Dutch husband and wife team Ben Boenk and Annemarie Retera, who spotted a gap in the market while visiting friends in Dubai.

“A good friend invited us for holiday and we got the idea while we were here,” says Retera. “We had small children at the time and this was definitely a gap in the market. The area had Mothercare and Babyshop, but not much else.

“Because we had small children ourselves we always look at the products wherever we go, and we just didn’t see anything much here.”

So the couple moved their family to Dubai in 2005 and started planning their new venture.

Retera adds: “My husband did hotel management and had a catering company, and I’m a lawyer in banking and insurance management, so we didn’t exactly have a retail background.

“But there were so many opportunities in Dubai. We wanted to do something very different.”

When they spoke to potential suppliers, they found that companies were extremely interested to enter the region’s market. But while finding merchandise was “not that hard,” Retera says that setting up the business properly was not particularly straightforward.

“After approaching suppliers the hard part started. Finding a location was really hard. On top of that, to get licences, visas for staff and things like this were not easy at all. We had money to use but we didn’t want to spend it on agencies to do it all for us.

“Looking back at our experience, I think our advice would be to not do it all yourselves! We lost a lot of time and money that way.”

According to Retera, things really started to happen for JustKidding when they the company opened its flagship store on Sheikh Zayed Road.

In a prominent position on the side of one of Dubai’s most used roads it shows prospective investors what the business is capable of. Something the owners were keen to ensure happened.

“We were looking for investment for a long time,” says Retera. “But we realised there was a lot to do before people became interested.

“When the flagship store opened, people came to know us. People became interested in investing and so we started negotiations.”

And so began the next chapter of the JustKidding story.

Speaking to various possible investors, the owners waited to find the right partners who could take the company to the next level.

Retera says: “It was a long path. Sometimes we didn’t want to make a deal, so we didn’t go with it. If it’s not the right thing for us, then we don’t want to consider it.

“But then AMZ came along. We saw very quickly that they were a good partner for us.”

Following lengthy discussions, JustKidding turned their entrepreneurial dream into a reality. In February this year the company announced a AED23m ($6.26m) franchise deal with AMZ Group, which will  not only see a significant financial investment in the brand, but also the opening of at least seven new JustKidding stores across the UAE, Oman and Kuwait.

“It’s just what we were looking for,” says Retera. “It’s a really good deal for us. They’ve done retail for other brands and we feel that they match well with us. They are passionate about what they do, which is important because we have to work together for a long time.”

The appeal of a deal such as this for small business owners is clear. The opportunity to grow the brand, expand its reach and increase profits is hard to turn down. Indeed, it’s what many entrepreneurs spend a lot of time and effort working towards.

For AMZ Group’s part, the equation also seemed to make sense.

First of all, as Retera says: “There’s a high birth rate here and high disposable income. And people are very brand conscious.”

But there was more. An annual turnover of AED14m ($3.81m), more than 20,000 customers per year, and an expected net worth of AED150-200m ($40.85m-$54.5m) within the next three years made JustKidding a very attractive prospect.

AMZ Group was established in the UAE by chairman Abdul Munim Al Zawawi, and has since built a diverse portfolio of retail businesses including fashion, food and beverage, aircraft manufacture and facility management among others.

The franchise agreement marked a big shift for Retera, who says: “We’ve sold the two existing stores to them so I didn’t actually have a job for a while! Now I’m more in charge of managing the franchise partners than managing the stores.

“So AMZ now own these two stores. The management has changed. People employed by AMZ are in charge of the stores and what we do is to make sure the concept carries on in the way we had in mind, making sure the customer service is right and that the look of the store is right.

“One thing we will continue to do is look at the mix of brands. I think something like 95 percent of brands will be prescribed by us, and AMZ will have a small percentage that they can choose themselves.”

“It’s such as exciting time for JustKidding – there is so much going on. The branches are now going to be in Oman, Kuwait, and four in the UAE. But it’s important we keep our finger on things and make sure it all goes the way it needs to go. That’s why it’s important to have partners you’re comfortable with.

“We are entrepreneurs and so are they. We’re both trying to do this the best we can, so it’s important we can both talk about things and be open with each other.”

Shortly after announcing the deal with AMZ, JustKidding also revealed that it was growing even more. This time, into Saudi Arabia.

This time the company has agreed a franchise deal with Rawafed Fashion, who will make a SAR5m ($1.33m) investment into the opening of the Kingdom’s first store, which will open in Riyadh’s Localizer Mall. A boutique store will follow, with further expansion in the country still under discussion.

Moving into a new country will come with its own challenges, says Retera, but also more opportunities.

She says: “We know we’re going to face different difficulties and challenges than those here in the UAE, but we’re ready for that. We’ll stick to the law and do things the right way.

“We think we could grow really quickly in Saudi Arabia. The market is really good – we could easily open four stores in Riyadh alone, and then there are places such as Jeddah and Dammam.

“The birth rate is 5.3, which is really good, especially for our business.”

“But there are things which could be seen as a concern. One of these is that we’re used to Dubai which is a multicultural environment, but we don’t know the full picture in other regions where there are not so many expats.

“Having said that our client base is 28 percent local Arabs, and they are very excited about JustKidding, which gives us a good idea about the other areas. Also, after six years of doing sort of the same thing, I know exactly what problems can arise and how to solve them. I’ve been there and done that, so hopefully there won’t be any surprises with the new stores.”

One particular aspect of the franchise deals that Retera is looking forward to is the spreading of JustKidding’s own private baby brand, JustEsesntials – a range of competitively-priced, commonly-used baby products which have been devised with the help of the shop’s customers.

“We started it two years ago,” explains Retera. “It’s developed by parents for parents, and it’s a great add-on to the JustKidding concept.

“We always bear customer comments in mind and we keep a wish-list from parents to give us ideas for what to do next, whether it’s JustEssentials or other brands.

“We visit international trade shows to keep up with all the new developments and we’re approached by suppliers all day long, so we’re in a really strong position on that front.”

This strong position is not only emphasised by the company’s forthcoming growth, but also its ambitious five year plan.

By 2018 JustKidding aims to have 25 stores across the GCC, with a presence in Egypt, Iraq, India and the Levant, and a turnover of AED300-400m ($81.7m-$109m). Target markets also include Africa, Malaysia and Eastern Europe.

And while Retera admits she’s always looking for new challenges, it is safe to say her immediate future remains committed to JustKidding.

“I want to establish this brand. That’s really important to me – I’m very passionate about it. What’s more, I have a lot of fun with it.

“The market has developed and customers have more brand awareness, which makes the job really interesting.

“Success doesn’t come easy. Sometimes it was really hard to keep our head up, but we had to always keep going. We are entrepreneurs and it’s part of our build.

“We left our home and country to chase the dream, so we had to make it happen.”

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