The owners of the latest store to open in Dubai Mall are banking on growing consumer demand in the Gulf.
Harman International opens showroom in Dubai Mall
The owners of the latest flagship store to open in Dubai Mall are banking on growing consumer demand in the Gulf to offset the "gloom" in western markets. Harman International yesterday launched a 16,000 square foot showroom - the largest of its kind in the world - in the UAE's newest mall. The company owns well known audio-visual equipment brands such as JBL, Infinity and Harman Kardon. The Harman chief executive, Dinesh Paliwal, chose to attend the opening instead of the high-profile Consumer Electronics Show (CES), the industry's biggest yearly event that opened in Las Vegas yesterday. "There is a reason I am here and not in Las Vegas: all the gloom and doom they talk about in the media in the US and Germany, that's all back there," he said, gesturing over his shoulder. "The excitement and imagination and creativity, the most courageous business moves, now they are all played out here - and I will never miss an opportunity to be part of it." The company plans to open 100 stores in the Middle East by 2012, led by its regional head, Mohamed Fadavi. Mr Paliwal, a corporate turnaround specialist who is credited with reviving the Swiss engineering conglomerate ABB, described Mr Fadavi as "the most ambitious businessman I have ever met". Harman was one of the first businesses in the consumer electronics industry to experience the reality of the emerging economic crisis. In late 2007, a leveraged buyout of the company by private equity firms was cancelled; it would have been the largest buyout in the industry's history. The private equity firms blamed an adverse change in the company's profitability, but many onlookers agreed that frozen credit markets played a major part in the US$8 billion (Dh29.38bn) deal being cancelled. Today, the company is suffering from a significant slowing of consumer spending. "We could not duck this economic downturn, we are feeling it," Mr Paliwal said. "But music is a necessity of life. People can put it off, for a while, but it's only a matter of time." The store in the Dubai Mall, named Harman House, emphasises the integration of audio-visual equipment into designer homes. Much of the store space is occupied by simulated living environments - upmarket bedrooms, kitchens and bathrooms - decked out with equipment from Harman brands. Companies such as Harman will always benefit from a housing boom, as most new homes are fitted with entertainment systems. Mr Paliwal said the "energy" of the Gulf gave him confidence that new stores such as Dubai Mall's Harman House would benefit from what he expected would be a quick turnaround in consumer sentiment. "People are scared right now and they are holding back," he said. "But a lot of people are holding back, not because they don't have money, but because they want to see how things shape up. As soon as they see signs of confidence return, they will come back out. There is a lot of pent-up demand." email@example.com