x Abu Dhabi, UAEWednesday 24 January 2018

Small brands proving beautiful for UAE malls

With 98 per cent of UAE retailers franchised, the country's major malls are dominated by well-established brands. But small independent local players and overseas brands wishing to tap the region's shoppers are emerging.

Muji: Lifestyle and home brand, first UAE store to be announced. AFP
Muji: Lifestyle and home brand, first UAE store to be announced. AFP

Renowned as a global shopping utopia, the UAE has more brands than many of its rival retail hubs.

Even fashion heavyweights such as New York, Paris and Milan cannot compete with the Emirates for the sheer number of retail brands.

But despite offering this concentrationhaven of fashion variety, shoppers, retailers and analysts all complain that the country's major malls have little to differentiate themselves from each other.

Andrew Grainger is a teacher in Dubai and a self-confessed brand connoisseur, owning more than 20 pairs of shoes.

From the United Kingdom, he says the malls in the UAE have few unique brands.

"I think the choice is quite poor," he says. "In general the shopping is quite poor and the clothes are more expensive [than the UK] for the same brands."

About 56 per cent of the world's retail brands are represented in Dubai, according to CBRE, a property specialist. Only London has a similar penetration of brands, with New York and Paris in hot pursuit.

Malls in the UAE are dominated by the region's big franchise retailers, such as Alshaya, Apparel, Azadea, Al Tayer and Landmark Group.

Among them, these companies operate the franchises for hundreds of brands and often have great negotiating clout when it comes to rents and winning space in malls.

Alshaya, which is based in Kuwait, runs most of the big mass-market fashion brands in the UAE, including Next, River Island, Topman and H&M. The other major brands such as Zara are gobbled up by the rest of the pack, and Al Tayer dominates luxury retail.

Landmark Group has a big collection of its own homegrown brands, such as Splash and Home Centre, and due to the retailer's size and scale, its stores now operate in swathes of malls throughout the region.

Almost 98 per cent of brands in the UAE are franchised, compared with just 6 per cent in the US, CBRE says.

"Major retailers only want to be in the major malls with high footfall, where they know the sales are going to be good," says Matthew Green, the head of consulting at CBRE.

This means the country's big malls are dominated by well-established brands, he says, and the large retailers find it easy to find space for those names in the major malls.

But if shoppers look hard enough, there are new, different and unique brands setting up in the Emirates.

Some are small, independent local players but others are brands from overseas that want to tap the booming retail market in the country.

"All the malls here are the same. Go into the malls and it's same thing everywhere," says Arshed Mohammed, the managing director of Spirit of Arabia, a new fashion brand hoping to break into the UAE market. "You could be in London in Dubai Mall."

Mr Mohammed has spent more than US$650,000 (Dh2.3 million) in the past year coming up with his affordable clothing concept with an Arabian twist, hiring a designer, building a website and renting a big shop space in the new Sunset Mall in Jumeirah in Dubai.

He became bored with the usual international and regional brands dominating the country's mall space and is trying to initiate change.

"I'm taking on the big boys, so I have to look professional," he says. "I was going to go very small, but then I would not be able to take them on."

Hastens is another new company, offering something different - if not a little expensive. It is an upmarket Swedish bed shop that has been handcrafting mattresses for more than 150 years.

It is setting up in Dubai and plans to sell beds starting from Dh24,000 to more than Dh300,000.

Shoppers can enter the new store at Sunset Mall and have a bed consultation and spend time in a private room "test-driving" different mattresses.

"Now is a great opportunity to bring these products to the Middle East," says Philip McDonald, the general manager of SLA Venture, the franchise holder for Hastens. "It's a spa-like feel when you walk in here."

Even the big retailers are bringing in new and quirky brands to keep customers interested.

Alshaya signed an agreement last month with Muji, a Japanese lifestyle and household brand, to bring the retailer to the Middle East.

Frederick's of Hollywood, a boutique ladies lingerie store, is also looking to expand into new malls, having first opened in Mushrif Mall in Abu Dhabi in August.

It competes against big-name brands such as La Senza and lingerie stores in department stores.

"We are trying to expand in every mall that serves the community," says Osama Rashad, the brand manager for Frederick's at Safeer Establishment, a subsidiary of Emirates Associated Business Group. "Getting into big, existing malls is somewhat of a challenge."

Some new brands find it very difficult to find space in established malls such as Dubai Mall, Mall of the Emirates and Abu Dhabi Mall, as the operators often prefer well established names.

"I would like to set up in the [likes of] Dubai Mall and the Mall of the Emirates, but you do not just walk into these malls," said Mr Mohammed. "You need to have very high connections to get into them."

Two malls that are giving new, smaller brands an opportunity are Sunset Mall in Dubai and Mushrif Mall in Abu Dhabi, where a high proportion of the stores cannot be found in major malls. About 40 per cent of the brands that are going into Al Wahda Mall's extension will also be new to Abu Dhabi.

Ziad Hameed, the leasing manager at Dubai Investment Properties, which runs Sunset Mall, says he is going for unique brands that would normally have opted for a boutique villa to sell their wares, but instead now want to be in a small mall.

"Sunset, the way it has been designed, we do not have entertainment elements, we are targeting shoppers," says Mr Hameed. "People who leave the building with shopping bags."

But analysts say community malls' willingness to embrace new and different brands is also due to weaker demand for space from the bigger retailers.

"The community malls are having to look elsewhere," says Mr Green.

"It's as much to do with the departure of the franchise [retailers] themselves as it is the smaller malls are looking for independent and different brands. There's a bit of both."