By Shane McGinley
US retail giant Bloomingdale's has a taste for expansion after its Dubai success, says chairman and CEO Michael Gould
Michael Gould doesn’t like getting his photo taken. As we sit in a New York diner themed setting, a photographer buzzes about clicking away in the background.
While the chairman and CEO of the iconic Bloomingdale’s department store brand appears affable and friendly and has a soft Boston accent, his irritation gives an insight into the determination that saw him rise to the top of one of America’s best loved retail empires.
“I don’t care how talented you are… Do you really think you are going to do anything with this face? Gould asks the snapper. “How much do you want to scare your readers? Take one photo.”
Having flown in from the US for an update on Bloomingdale’s Dubai store in Dubai Mall, the retail giant’s first international venture outside its homeland, Gould’s modesty has been tested to the limit as only hours before he was forced to have his photo taken with a four metre tall rubber gorilla.
The King Kong installation was the focal point of the store’s successful ‘New York New York’ 2011 Autumn/Winter marketing push. The six-week campaign was designed to mirror the sights and sounds of the Big Apple and included a range of in-store events and offerings.
Frank Sinatra lyrics illustrated the big city’s unofficial anthem in store windows, a yellow cab car was parked outside the store, and designers such as Diane von Fürstenberg created special items especially for the Dubai outlet.
The campaign caused quite a buzz around the city, not just for the enormous eye catching simian roaring into sight in Dubai Mall, but the appearance of Hollywood actress Eva Longoria, who flew to Dubai to give the opening some star power and attracted crowds of shoppers and celebrity spotters.
While Gould’s in-store appearance was more low key, he is very pleased with the reaction to the campaign, the first of its kind in Dubai and which has upped the game for retailers in the city.
“I would say that there is no question that business has been very good before the event and there has been an incremental lift to business. So, so far we are very pleased from a sales point of view but there are other elements equally important.
“An event like this gives the store enormous energy. I was in the store six months ago and just the difference in the energy level is palpable. The visual impact of the windows is great as it puts more interest in the store.
“Bloomingdale’s is about of the moment and newness… The sales associates themselves, you can see the pride in it. You can’t quantify that in top line sales and bottom line sales,” he gushes.
One of the elements that garnered the campaign such attention, which was designed especially for the Dubai store, was the attention to detail and this was something Gould says he experienced firsthand.
“I saw a bureau with all these chest of drawers and if you make a purchase over AED25 or AED100 or something you can go to this chest and it has six across and ten down drawers. You open it and take out an envelope and in that envelope is an extra AED50 certificate or whatever. Bloomingdale’s is of the moment, Bloomingdale’s is fun,” he adds in an unashamedly American way.
He could easily have been sent a video of the campaign as he only visited the store six months previously, but Gould said he wanted to check it out for himself.
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“The folks in Dubai have done a great job, they are learning all the time and the difference between the stores today and when I saw them six months ago is enormous.” His upbeat confidence is in contrast to over a year ago when the store opened when he was predicting that Bloomingdale’s Dubai was likely to be the its only international experimentation.
“I think this is a one store, new concept. This is the first time we’ve expanded a Bloomingdale’s store outside the US. I can tell you we have no plans right now [for more stores]. I’ve not visited any other sites outside the US, I have no plans to. I think we want to see how this works,” he told Arabian Business in Jan 2010 at the grand opening of the store.
“No one — with all due respect — no large US department store has been successful outside the United States. And I look inside the US and no large store from Europe or Asia has come to the US and had enormous success. It is about translating the brand DNA — and it’s just not simple,” he said.
Opened in Dubai Mall in January 2010, the store comprises a 146,000 sq ft fashion and accessories store, and a 54,000 sq ft home store.
The turnaround in fortunes for Dubai has raised Gould’s somber mood and his forecast for the prospect of more stores is now much more positive. The Dubai gamble seems to have paid off for him and local partners, the UAE-based retail conglomerate the Al Tayer Group, who entered into a joint venture to invest $73m bringing the store to the Middle East.
“We signed the agreement at the height of the tourism and building in Dubai... When we opened a year and half ago [the economy]… had come off the bottom.”
“[Al Tayer] just ended their fiscal year three months ago and had a terrific performance. And the first quarter of their new year, which just finished in September, has been spectacular.
This boost has meant Gould has not ruled out more stores in the region for the 150-year-old retailer. “We are not prepared to talk about doing Bloomingdale’s anywhere else,” he says when asked about whether Bloomingdale’s Doha was a likely possibility. “[Dubai] was a unique situation and we want to be as successful here as humanly possible.
“I am sure that somewhere down the road someplace or places there will be opportunities for Bloomingdale’s but the most important thing is to be successful with the brand in Dubai.”
So what has been the turnaround in his opinion? He places the credit firmly with the Al Tayer Group, which has partnered with a number of high-end brands in the Middle East, including Harvey Nichols, Armani, Gucci, Emilio Pucci, Bvlgari and Boucheron.
“I have learnt that you have to pick your partner right. Your family you can’t pick but your friends you can pick. I think the single most important thing was the process we went through to pick the Al Tayer Group.
“My feeling was at the time that the Al Tayer had the best understanding of what Bloomingdale’s was and their DNA and our DNA was as close to a match and as perfect as we were going to find and I can tell you that in the two and half years that we have had the relationship and the year and half we have been open we have never had a disagreement.
“If we say creatively that is wrong or we say we don’t agree with them it wouldn’t happen. We have never said do this and they have said no. I think that is as great a partnership as you can have.
Dubai is the second-most attractive emerging market for retailers after China, in part because of high disposable income, according to management consulting firm AT Kearney. Retail accounts for 30 percent of gross domestic product in the emirate, home to about 40 shopping malls, Standard Chartered Bank estimates. Another report, released in June, said the Gulf state had the highest clothing sales per capita in the developing world at $785 per year.
This has meant Bloomingdale’s is one of a slate of US stores that have expanded their brands into the Gulf, in a bid to tap the region’s wealthy population.
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Limited Brands, operator of the Victoria’s Secret chain, and American Eagle Outfitters, are among the US retailers seeking a foothold in Dubai as domestic sales remain subdued.
“I think the upscale business has been very strong the last few years and I think the upscale has been strong the first half of this year. There is no question in my mind the upscale business has been stronger… We’ll see what happens as we go down the road,” says Gould.
While retail in the US has been subdued as a result of the downturn, Bloomingdale’s was one of the key factors which helped its parent company Macy’s Inc report a higher third-quarter profit last year.
Macy’s reported net income of $139m, for the quarter that ended 29 October, compared with $10m in the third quarter of 2010. This gives credence to Gould’s assertion that “retail in America has been good.”
“I am cautiously optimistic. The world is very fragile, so you wake up one day and you get good news from Greece and the market goes way up. You get a little bit of bad news from Greece and the market goes down, so I don’t want to talk about what will happen but I can talk about how positive we are here at Bloomingdale’s and how we have positioned ourselves in the marketplace.”
One of the elements which helped Macy’s achieve its surge in profits was healthy returns in internet sales and it is now also looking to tap into the Middle East market. Arab fans of the luxury retailer can now order goods direct from the store following a deal signed with an overseas shipment firm.
Macy’s has launched an online version of its store, which has shipping services which will cater to overseas customers 91 countries worldwide, including Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and UAE.
“International shipping will enable Macy’s to build upon its existing customer base beyond the United States by exposing our product offerings abroad,” says Kent Anderson, president of macys.com. “In 2010, non-US based shoppers accounted for 36 million visits to macys.com,” he adds.
Online retail has seen a surge in the Middle East in recent years and last year a MasterCard survey found the number of people using the internet to make purchases in the UAE rose to 42 percent last year.
Gould himself got into retail when he was fifteen years old and was looking for a job. “I was looking for a summer job and I got a job in a department store in New York and I liked it and I finished up school and went back for the training programme and that’s what I’ve done and I’m passionate about it.”
Gould is adamant that this is best approach and having the best people is the most important factor to the success of a retail business.
“People, life is about people, nobody ever remembers a number. Give people an opportunity to be better than they thought they could be, that’s my business.”
This approach definitely seems to have paid off in Dubai and, the way things are going, who knows what exciting plans will be revealed. It seems Gould’s Middle East adventure is only just beginning; just don’t expect to see too many pictures of it.