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Tue 18 Feb 2020 09:17 AM

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Chalhoub Group to grow e-commerce following closure of 60 stores in Middle East

CEO Patrick Chalhoub said he would rather close shops that are making losses and invest in opening tech-driven stores in new spaces like community malls

Chalhoub Group to grow e-commerce following closure of 60 stores in Middle East

While the luxury group saw more store closures than openings in 2019, Patrick Chalhoub said he would rather close shops that are making losses and invest in opening tech-driven stores in new spaces such as up-and-coming community malls which offer “perhaps less footprint but better footprint”.

As it said goodbye to nearly 60 physical stores across the Middle East in 2019, the region’s largest luxury distributor Chalhoub Group will launch three new e-commerce websites this year, according to CEO Patrick Chalhoub.

Speaking to Arabian Business, he remained tight-lipped over which brands the group is introducing online, but said the company is reassessing its brick and mortar strategy.

“In the coming 3 months, we will have two or three major sites which we will be opening. I will not unveil them because we will unveil them in due course, but you will be quite astonished over some of the brands that are coming online. So we’re coming online but also reassessing our brick and mortar, closing some stores or reinvesting,” he said.

Chalhoub Group has already opened 12 e-commerce websites for its brands in the Middle East - including Level Shoes, Sephora Middle East and L'Occitane - and also launched the Arabic website of online retail giant Farfetch.

Community malls

While the luxury group saw more store closures than openings in 2019, Chalhoub said he would rather close shops that are making losses and invest in opening tech-driven stores in new spaces such as up-and-coming community malls which offer “perhaps less footprint but better footprint”.

He said: “Bad retail is dead so either we invest in what we have, or we better close it. There is no more space for mediocracy… there are new malls coming, new community areas… there is more retail space available in good locations.

“So today stores that are losing money and where we’re not seeing traction for the customer, we prefer to really shut them down and where we feel our customer in a community or specific space is looking for our brands and products and we could give experience, human touch, then we are able to do so… it’s not brick and mortar retail which is dead, what is dead is bad retail,” he said.

Chalhoub said last week that retailers in Dubai are being offered free space and fit-outs in selected malls despite the shopping centres’ footfall being too low to sustain luxury retails brands, adding that Dubai is “over retailed” due to the surge in mall openings in the years 2013-2015.

The supply has not been met with enough demand, according to Chalhoub, which will lead to the closure of shopping centres that do not adapt to changing trends.

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