The UAE-based baby store JustKidding has agreed a Dh23 million (US$6.2m) franchise deal, under which it plans seven new stores in the Arabian Gulf over the next three years.
The retailer, which currently has two stores in the Emirates, plans two boutiques in Abu Dhabi, one in Dubai and possibly another in the Northern Emirates, in addition to new branches in Oman and Kuwait. It has signed a franchise partnership with AMZ Group, which includes a five-year contract for the JustKidding stores in the three Gulf countries.
AMZ has also acquired the two existing JustKidding stores in Dubai, located at Al Safa and the Gold & Diamond Park. AMZ will own the UAE retail stores but JustKidding will retain the rights to the brand name
JustKidding was established in 2006 and introduced a number international brands to the UAE market, including Stokke and Bugaboo. It currently has an annual turnover of Dh14m and expects revenues of Dh150m to Dh200m within the next three years.
"After establishing [our flagship store] we thought: OK, now the brand is mature enough to think about partnering up with a franchise partner," said Annemarie Retera, the chief executive and co-founder of JustKidding. Industry professionals "say that the baby product market is the growth market of the future", she added.
The Middle East has both a high birth rate and a burgeoning young population, factors that made the region an attractive destination to open a baby store, Ms Retera said.
AMZ is based in Dubai and manages a number of brands in the Emirates including Havaianas and Vilebrequin.
Neil Isaacson, AMZ's strategic business development director, said the group initially got in touch about opening branches in Oman only. "The conversation expanded from there in terms of how we could help each other grow the concept more widely."
Despite having franchised out its business in the Gulf, Ms Retera said JustKidding had ambitions to expand the brand even farther afield with other partners.
"The idea is to establish 25 stores inside and outside the region. We are looking at India, Egypt and the Levant, maybe even Iraq - but we need to see how it goes," she said. "What I can say is at this point in time we have a lot of potential interest from other players in the market."