Considering entry into Iran and expanding in Egypt, Saudi Arabia and Asia as the Dubai-based conglomerate seeks to grow its retail offering in populous markets.
Al Futtaim Group eyes Iran’s growing retail market in regional expansion
Al Futtaim Group is considering entry into Iran and expanding in Egypt, Saudi Arabia and Asia as the Dubai-based conglomerate seeks to grow its retail offering in populous markets, a company official said.
“We are closely monitoring the developments and we might enter Iran,” said Paul Delaoutre, the president of retail at Al Futtaim. “It is a very large population, 80 million people, and they are already sophisticated in their approach to fashion and they are very keen on spending money on western brands.”
The Iranian retail market grew by 30 per cent in 2014 compared with a year earlier, according to data provider and research firm Euromonitor International. Sales are forecast to grow further because of the country’s young population and high disposable income.
Al Futtaim Group, which has franchises in the region for brands ranging from Ikea to clothing chain M&S, is present in 19 countries spanning Asia to Egypt.
The group has 1,000 retail stores, one third of them in Asia and the remainder in the Middle East.
“We are focusing very much on growing department stores and growing e-commerce and on getting bigger in large markets like Saudi Arabia, Egypt, Malaysia and Indonesia,” said Mr Delaoutre.
In the UAE, the conglomerate is planning to add two new brands this year, one in fashion and one in the home segment.
It has also signed a joint venture agreement with a luxury retailer, the Chalhoub Group, to bring Singapore’s Robinsons department store to the Middle East region. The first store, to be located in Dubai Festival City mall, will span 18,000 square metres and will be followed by more stores in the Arabian Gulf region, probably next in Saudi Arabia.
Al Futtaim’s retail business grew last year in the UAE, but this year will be challenging amid the economic downturn sparked by low oil prices, said Mr Delaoutre.
“We have been growing and I would say we are lucky we have a portfolio that is quite balanced between low price offers and premium offers,” said Mr Delaoutre. “So the premium segment has been difficult but the lower-price segments we have done quite well.”
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