Al-Shaya – Retail King in GCC / Exclusive Interview

Last week, Mohammed Alshaya expanded his empire to include — of all things — lingerie, opening the Middle East’s first Victoria’s Secret outposts in Kuwait City and Dubai. It’s an unlikely choice for a retail market not known for huge sales of unmentionables, proving again that Alshaya — who as chairman of retail operator M H Al Shaya Co oversees brands like The Body Shop, Mothercare, Boots and Starbucks– remains the undisputed, visionary king of Gulf retail.

“Victoria’s Secret is a format that is done for the market,” he told delegates at the Arabian Business Economic Forum, adding that the early stock at the Kuwait and UAE stories would be “edited — mostly basics,” including the more conservative end of the line — robes and cosmetics.

The notoriously racy brand joins upwards of 55 others in Alshaya Co’s portfolio, including other shopaholic must-stops like River Island and H&M and accessories giant Claire’s.

Speaking at the Armani Hotel, Alshaya said his Kuwait-based company, founded more than 150 years ago in India by Mohammed Hamood Alshaya, looks to expand by more than 1,250 stores next year.

He also said he planned to introduce a number of new brands in 2011, including Dubai openings for niche Western chains like American sandwich maker Potbelly and burger outlet Shake Shack, Bath and Body Works and flagship Victoria’s stores in Dubai, Kuwait and Beirut.

The new outlets will aid in creating new jobs — Alshaya already employs more than 20,000 workers from eighteen countries — as Dubai and the GCC battle rising unemployment. “There’s a chilling spectre of under-unemployment,” he said in his address. “But there is also a culture in our region that it is considered demeaning to serve people. That is sad.”

Though he pointed out that the latter made it difficult to recruit shop employees, he was quick to point out the desire for his workforce to be made up entirely of local nationals.

“If we didn’t have to employ foreign nationals, imagine how much money would be saved instead of being sent overseas?” he said.

Alshaya knows these overseas markets, having earned a business degree at Wharton, started his retail career at Mothercare in the UK at 24, and once listing long, anonymous walks around European cities as one of the key ways he gets a feel for his new partnerships. He called unemployment, left untreated, “a potential crisis in the Arab world,” citing a UN Development Programme study which said the region needs to create 51 million jobs in the next 20 years just to keep unemployment rates from sliding further, with the GCC alone needing to claim responsibility for four million of them.

To that end, recruiting local talent into the private sector is an issue he hopes to tackle this coming year. At the Armani, he described the recruitment of nationals into private retail jobs as “difficult,” adding that Arab governments’ subsidisation of public sector work was “not the answer” and that in order for there to be a substantial rise in employment, Arab nationals needed to embrace the private sector.

“We have very few retailers who are born here,” he said. “Retail is an amazing sector to work in.”

One way to do that could be a venture capital system, established by local businessmen like Alshaya, that helps young, local entrepreneurs start their own brands. Alshaya said says that his own company has seen huge success in attracting, incubating and training new talent.

“But I agree that the private sector has to somehow put a fund in place for SMEs,” he said. “I think the government has to pull its hand from guaranteeing jobs in the public sector. It hires, but it does not fire.”

Perhaps the expansion into flashy, un-conservative brands like Victoria’s Secret will, ideologically, put Arab retail at the same level as liberal Western cities and make the difference in luring recent graduates and returned nationals into retail.

Alshaya said he thought Dubai was now ahead of traditional shopping bastions Paris and New York in terms of brand presence, with a mix of European, American and Arab brands not seen anywhere else. “The diversity of brands — it’s much more competitive here,” he told the audience, citing the gold market as one that was “bigger than Paris and Milan.”

Alshaya also flip-flopped, discussing Arab brands which had gone global. The most profitable, in his opinion, was taking flight — “Emirates is the biggest global brand in the world.”

Fortunately for Alshaya, he seems to buy into his own shop talk. One audience member wondered whether Dubai’s residents were forever now “condemned” to shop in malls.

“No!” the retail king said, half smiling. Mega-malls, which have become day-long entertainment destinations of their own, “are the perfect place to shop.”

Source : Arabian Business