By AB staff writer
Chalhoub official says new malls required to maximise retail opportunities.
Despite a high population with good purchasing power, the lack of luxury retail space in Saudi Arabia is hampering firms’ attempts to maximise opportunities there, a leading local executive has warned.
According to Fadi Jabbour, the Chalhoub Group’s regional retail chief operating officer, Saudi visitors from the Eastern Region provide as much as 50 percent of the clientele of high end stores in nearby Bahrain.
Speaking to Arabian Business, Jabbour said: “The high end has not found a second address in Jeddah; there is Al Khayyat, which is a very elite destination."
He added: “But there is a need for a more mainstream destination such as the Mall of the Emirates [in Dubai] or Bahrain City Centre. The opening of Star Avenue in Jeddah has not yet given the full results that people were expecting.”
Jabbour described the Chalhoub Group’s first half in Jeddah as “quite flat” and said that he could see no new developments on the horizon that would solve the problem.
He said: “It will take a bit of time to find a nice mall that offers that kind of interesting shopping destination in Saudi Arabia. Shopping is one of the main pastimes in Saudi, but there is not a single one that offers that level of service.”
But the Chalhoub Group executive earmarked Riyadh as a market with significant potential.
Jabbour said: “A lot of people don’t realise that there are about seven million people in Riyadh, with good purchasing power. Today, Riyadh’s retail network is growing, and most of the projects that are performing have been recent."
He added: “There is now more sophistication in the retail industry in Riyadh; the marketing and presentation is better and the shopping experience has been improved. Look at locations like Kingdom [Centre], where you are looking at new openings, and new brands.”
Sales growth at the luxury retail group rose by 14 percent in Saudi Arabia during the first half, the executive added.
The Chalhoub Group has franchise or joint venture links with over 280 luxury brands, including Christian Dior, Louboutin and Louis Vuitton, in the Middle East.
It opened 25 new outlets in the first half, with another 20 planned for the rest of the year. The firm has more than 350 stores throughout 14 countries in the Middle East.