Retail giant sees fashion sales jump by 21% in Q1

Chalhoub Group’s UAE unit sees gains on back of unrest, strengthening economy
Retail giant sees fashion sales jump by 21% in Q1
Middle East shopping, Middle East retail, GCC retail
By Edward Attwood
Sun 05 Jun 2011 11:19 AM

One of the UAE’s biggest luxury retailers has posted a 21 percent growth in fashion sales in the first quarter in comparison to the same period a year earlier, helped by rising consumer confidence and higher tourist numbers into the country.

Allied Enterprises, the trading name of the Chalhoub Group’s UAE business, said that sales of all its products – which also include gifts and beauty products – were up by seven percent, year-on-year.

“In 2011, we had initially planned for a normal year of growth, so five to six percent,” Allied Enterprises managing director Mansour Hajjar told Arabian Business.

“We have been surprised by two aspects; the first was that the results were much better and the second was that the influx of tourism into Dubai was way beyond expectations.

“Sadly this has been due to events in the region, which benefited Dubai; tourists that might have wanted to go to Egypt, Tunisia or Syria, or who were seeking the sun, came to Dubai.”

Hajjar added that the strong hike in retail sales had come despite the Dubai Shopping Festival in January and February, where shoppers tend to purchase cheaper or sale items.

The official said that the firm continued to see strong sales up until the end of April, but that the summer period would see lower growth.

“However, we expect that September onwards we’ll continue this growth level,” Hajjar said. “So most probably we’ll have to revise our growth forecasts upwards for the end of the year.”

In terms of the various malls, Hajjar described sales results at Dubai Mall (which saw a 17 percent rise in footfall last year to 47m) as “fantastic”. However, he admitted that the success of the Emaar-owned property had affected sales at Wafi and BurJuman.

The BurJuman is currently undergoing renovation and expansion, adding a cinema and more food and beverage outlets as it tries to attract consumers away from the larger malls.

“As a matter of fact, we haven’t seen major decline [in the BurJuman] – we’ve seen some declines obviously – in all of our stores,” said Hajjar. “But for very high-end brands that are part of the Chalhoub Group we’ve seen declines that are reasonable.

“What one likes about the area in the BurJuman is that the shopping area is beautifully designed and is very pleasant environment. Shops like Saks Fifth Avenue pride themselves on their customer service, and also to a certain extent you avoid the crowds you can get at other malls,” he added.

Last year, Allied Enterprises saw 17 percent sales growth over 2009 after what the official termed as “a year of consolidation and readjustment.”

The Chalhoub Group sells around 280 brands in over 370 stores across 14 countries in the region.

Apart from home-grown brands such as Tanagra and Faces, the group also has retail joint ventures with Louis Vuitton, Christian Dior and Christian Louboutin. It has more than 6,000 employees.

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