The Chalhoub Group, the franchise partner for luxury brands such as Louis Vuitton and Fendi in the Middle East, is focusing on boosting its market share as lower economic growth and a shift in tourist mix affects revenue.
The first two months of 2016 were flat compared to the same period last year, when generous handouts by the newly appointed Saudi King Salman helped Saudi shoppers to spend on luxury goods, said Patrick Chalhoub, the Chalhoub co-chief executive.
The group, which operates more than 650 stores in 14 countries, expects to eke out modest growth this year. The oil price rout has slashed government expenditure in the energy-exporting Arabian Gulf region and lowered economic growth, crimping the spending power of consumers in these countries.
“I am telling my team not to focus today on what figures you are going to have,” said Mr Chalhoub. “I do not want them to focus their time into making budgets. I want them to focus their time on doing a good job and then to gain market share, rather than lose it.”
Mr Chalhoub said the company may add some 60 stores this year while closing others, depending on their profitability.
He did not say which stores would close.
Mr Chalhoub also cited the change of mix in tourists in the UAE, the main tourist destination in the Gulf, as a key challenge to luxury retailers.
For example, the trickle of Russian tourists, traditionally big spenders on luxury products, is affecting the UAE tourism industry because of the strengthening of the dirham, which is pegged to the strong dollar, against other weak currencies such as the Russian rouble and the Chinese yuan.
“We have less Russians who were strong spenders in the retail market, especially into luxury goods,” said Mr Chalhoub. “[There are] more Chinese but from the lower and middle class who spend less, but perhaps more of GCC nationals, more Indians and Africans. We have to adapt to this change in the tourist mix.”
Last year, the number of tourists to Dubai from Russia, CIS and eastern Europe dropped by 22.5 per cent compared with the previous year, according to figures from the government-run Dubai Tourism.
Meanwhile, 450,000 Chinese tourists travelled to Dubai last year, up 29 per cent from a year earlier.
The group does not expect to expand into new markets and will focus on its existing business for the time being.
“In this market situation, for me the focus is on running the existing business, so I’m much less bullish on expanding,” said Mr Chalhoub. “The market situation will remain complicated and we have to adapt to the changes. We don’t expect it will pass and come back again as before.”
Overall, the UAE retail market is forecast to grow at a compound annual growth rate of 5.2 per cent between 2015 and 2020, according to the data provider Euromonitor International.
The retail market in the UAE was forecast at $49.7 billion last year, with luxury retail accounting for $1.73bn, according to Euromonitor.
“Lower growth is expected during the short and mid-forecast period,” said Diana Jarmalaite, a research analyst at Euromonitor. “The latter period will be highly affected by the economic uncertainty that is caused by all-time low oil prices, as well as unfavourable currency exchange rates in Russia, euro zone and China.”
In the Gulf overall, the retail market is expected to slow through 2020 because of security in the region and the expected implementation of a value-added tax in 2018 across the region.
dalsaadi@thenational.ae
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HEY%20MERCEDES%2C%20WHAT%20CAN%20YOU%20DO%20FOR%20ME%3F
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A%20QUIET%20PLACE
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Dolittle
Director: Stephen Gaghan
Stars: Robert Downey Jr, Michael Sheen
One-and-a-half out of five stars
Company%20Profile
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
The specs: 2018 Mitsubishi Eclipse Cross
Price, base / as tested: Dh101,140 / Dh113,800
Engine: Turbocharged 1.5-litre four-cylinder
Power: 148hp @ 5,500rpm
Torque: 250Nm @ 2,000rpm
Transmission: Eight-speed CVT
Fuel consumption, combined: 7.0L / 100km
How to become a Boglehead
Bogleheads follow simple investing philosophies to build their wealth and live better lives. Just follow these steps.
• Spend less than you earn and save the rest. You can do this by earning more, or being frugal. Better still, do both.
• Invest early, invest often. It takes time to grow your wealth on the stock market. The sooner you begin, the better.
• Choose the right level of risk. Don't gamble by investing in get-rich-quick schemes or high-risk plays. Don't play it too safe, either, by leaving long-term savings in cash.
• Diversify. Do not keep all your eggs in one basket. Spread your money between different companies, sectors, markets and asset classes such as bonds and property.
• Keep charges low. The biggest drag on investment performance is all the charges you pay to advisers and active fund managers.
• Keep it simple. Complexity is your enemy. You can build a balanced, diversified portfolio with just a handful of ETFs.
• Forget timing the market. Nobody knows where share prices will go next, so don't try to second-guess them.
• Stick with it. Do not sell up in a market crash. Use the opportunity to invest more at the lower price.
COMPANY%20PROFILE%20
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Specs%3A%202024%20McLaren%20Artura%20Spider
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COMPANY%20PROFILE
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Profile of Tarabut Gateway
Founder: Abdulla Almoayed
Based: UAE
Founded: 2017
Number of employees: 35
Sector: FinTech
Raised: $13 million
Backers: Berlin-based venture capital company Target Global, Kingsway, CE Ventures, Entrée Capital, Zamil Investment Group, Global Ventures, Almoayed Technologies and Mad’a Investment.
COMPANY%20PROFILE%20
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Zodi%20%26%20Tehu%3A%20Princes%20Of%20The%20Desert
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HUNGARIAN GRAND PRIX RESULT
1. Sebastian Vettel, Ferrari 1:39:46.713
2. Kimi Raikkonen, Ferrari 00:00.908
3. Valtteri Bottas, Mercedes-GP 00:12.462
4. Lewis Hamilton, Mercedes-GP 00:12.885
5. Max Verstappen, Red Bull Racing 00:13.276
6. Fernando Alonso, McLaren 01:11.223
7. Carlos Sainz Jr, Toro Rosso 1 lap
8. Sergio Perez, Force India 1 lap
9. Esteban Ocon, Force India 1 lap
10. Stoffel Vandoorne, McLaren 1 lap
11. Daniil Kvyat, Toro Rosso 1 lap
12. Jolyon Palmer, Renault 1 lap
13. Kevin Magnussen, Haas 1 lap
14. Lance Stroll, Williams 1 lap
15. Pascal Wehrlein, Sauber 2 laps
16. Marcus Ericsson, Sauber 2 laps
17r. Nico Huelkenberg, Renault 3 laps
r. Paul Di Resta, Williams 10 laps
r. Romain Grosjean, Haas 50 laps
r. Daniel Ricciardo, Red Bull Racing 70 laps
Confirmed%20bouts%20(more%20to%20be%20added)
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Kill%20
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The%20specs
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Tips on buying property during a pandemic
Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.
While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.
While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar.
Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.
Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.
Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities.
Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong.
Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
COMPANY%20PROFILE
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Company profile
Company: Eighty6
Date started: October 2021
Founders: Abdul Kader Saadi and Anwar Nusseibeh
Based: Dubai, UAE
Sector: Hospitality
Size: 25 employees
Funding stage: Pre-series A
Investment: $1 million
Investors: Seed funding, angel investors
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
THE LOWDOWN
Romeo Akbar Walter
Rating: 2/5 stars
Produced by: Dharma Productions, Azure Entertainment
Directed by: Robby Grewal
Cast: John Abraham, Mouni Roy, Jackie Shroff and Sikandar Kher