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Kuwait Report
Marcopolis presents the Kuwait Report focused on the investments, doing business, economy and other topics featuring interviews with Kuwaiti leaders. The sectors under review in this issue are industry, oil and gas sector, investments, banking sector, telecom sector and many more.
- Published: March 11, 2010
Kuwait Luxury Retail, CEO of Chalhoub Group, Anthony Chalhoub
Bain & Company reported last year that the luxury sector was facing between a 15 and 20 per cent decline during the first two quarters in 2009, shrinking to €153 billion from its 2008 level of €170 billionHow does Kuwaiti market compare with other markets globally (developed markets), in terms of how the luxury retail market is structured and trends that you see in the region? What is the most striking difference? .
CEO of Chalhoub Group, Anthony Chalhoub: Kuwait is more mature as a market and is probably the most mature market of the GCC countries in this field, with a long history of renowned luxury brands opening their first shop in Kuwait. Subsequently, Kuwaiti customers are very brand-aware; fashion-oriented and act as real trendsetters for the rest of the region. We often witness customers visiting our shops with 1 or 2 pictures collected from the Internet, of fashion shows that only happened a few hours earlier, asking to pre-book these items to be the first to acquire them. We expect the region to be relatively resilient: 2% growth in 2010, compared to a 15-20% decline globally. Of course, some brands have been affected more than others, but it was nothing catastrophic. Some top brands even continued gaining market shares and increasing their sales.
Is the reported tentative recovery in the US and elsewhere being felt on your performance? Do you see the first signs of the recovery?
CEO of Chalhoub Group, Anthony Chalhoub: Of course, we have not been affected like in the US and, of course, customers are spending again more openly. In fact, we cannot compare what happened in the US versus what happened in Kuwait in particular or in the Gulf in general, as the Middle East region, and Kuwait even more so, has been relatively secluded from the luxury crisis felt everywhere else in the world.
How did Chalhoub Group respond to the downturn? Has your strategy shifted into brands conveying the message of heritage and authenticity?
CEO of Chalhoub Group, Anthony Chalhoub: Customers are questioning what is important to them and the way they should act. Their attitudes and inspirations are going back to values of authenticity and heritage in this period of instability. This is definitely an opportunity for new brands that are able to convey those values to appear in the market. Therefore, some brands gained market shares and some brands grabbed the opportunity to start supplying our markets.
How can a company mitigate the effects of the crisis on consumer confidence and reassure the customers? (from Chalhoub Group perspective)
By conveying the core values of the brands and their philosophy.
By offering to consumers products that please them.
By transforming a shopping experience into a pleasant journey.
How would you describe your expansion plans for 2010 - launching new brands or revamping other brands? What will be your brand strategy?
CEO of Chalhoub Group, Anthony Chalhoub: In 2009, we increased our network by 45 shops, not taking into consideration refurbishments in our existing network. In 2010, we will continue expanding, with 35 to 40 projects running, on top of some important renovations. We recently signed agreements for the retail development of brands like Christian Louboutin and Michael Kors in the Middle East and also started representing childrenwear brand Il Gufo. We are very positive about the future. I think that continuing our expansion, and modernizing existing shops is a clear mark of our optimism for the region.
How do you see your presence in the Middle East (are you looking to expand or consolidate)? Are you planning to tap the lucrative markets of Indian subcontinent?
CEO of Chalhoub Group, Anthony Chalhoub: In the coming 2 to 3 years, we will focus more on the Middle East Market, keeping a careful eye on the Indian Market.
How would you characterize Chalhoub communication and marketing strategy of the 21st century, how innovative is your approach to the market?
CEO of Chalhoub Group, Anthony Chalhoub: Work with the customers to satisfy their shopping experience
- From getting to know our customers better, to enhancing their retail journey in our shops and creating value for them. This is where we can leverage the added value of our consumer surveys, Chalhoub Retail Academy and expert merchandisers.
Work with the brands to develop their sales
- From advising them on location, roll-out, retail and marketing to developing appropriate promotions and events, or offering them new retail solutions (our own concept-stores) when we identify a gap in the market.
As a well known and established company, do you look for investors or it is vice versa investors are coming to you?
CEO of Chalhoub Group, Anthony Chalhoub: From our Corporate Governance and Family Governance perspective, it is not our intention to be in any stock market. It does not prevent us to have punctual strategic alliances to develop specific countries.
Lastly, what is the creed that governs Chalhoub Group?
CEO of Chalhoub Group, Anthony Chalhoub: Today, our founding values still federate our teams and guide us through changing environments and markets: Respect, Entrepreneurial Spirit and Excellence.
