“Shopping in the Middle East is a matter of entertainment rather than just buying”
Patrick Chalhoub is the Chief Executive of Chalhoub Group
The Dubai-based Chalhoub operates and grows the retail businesses of international retailers in the Middle East. Specialising in high-end fashion and beauty brands, it does not publish turnover and profitability. Global Retail News met Patrick Chalhoub, the CEO of the eponymous group.
Global Retail News: Can you explain Chalhoub’s retail business?
Patrick Chalhoub: My parents created the family firm of Chalhoub in 1955, based in Damas, Syria. We imported French luxury brands such as Christofle tableware for the new upper class. Chalhoub runs 600 shops covering up to 10,000 sq.m. GLA in 14 Middle Eastern countries. In 2013, our annual sales jumped by 20% versus 2012. It is active in three retail sectors: beauty (47% of our turnover), fashion and accessories (40%) and home equipment (5%).
GRN: What international retailers do you partner with?
PC: Let’s consider Sephora and L'Occitane in the beauty sector, and Carolina Herrera, Dior, Chanel and Lacoste in the fashion sector. We have been the franchisor of the U.S. department stores Saks Fifth Avenue since 2004. We distribute Kartell and Christofle (home equipment). We also created our own retail brands: Ogo (beauty), Tanagra (home and decoration) and Katakeet (children's clothing).
GRN: When did Chalhoub start expansion in the Gulf?
PC: We started operations in Saudi Arabia and in Kuwait from 1959. We are now active in 14 countries, from Egypt to Iran, including those in the Arabian Peninsula. In 1990, due to the Iraqi invasion, our headquarters moved from Kuwait to Dubai.
GRN: What is the priority? Franchise or fully owned units?
PC: We run 450 franchised stores and 50 fully owned units. Stores in full ownership are mostly multi-brand units like Sephora with 30 stores and Saks, with 2.
GRN: What type of collaboration do you build with retailers?
PC: The ideal scenario is to start with a franchising agreement, allowing foreign retailers to test the local market. After 5 to 10 years, many move into a joint venture lasting up to 30 years. The international firm manages marketing and communication whilst Chalhoub controls logistics and purchasing…