Made in UAE: Intercoil makes it its business to put you to sleep

Its new retail strategy, 'The Bedroom by Intercoil' that was introduced at the beginning of the year is a brave move encompassing an A to Z offer on everything that is found in one’s personal boudoir.

Intercoil supplies 10 international hotel groups across the region. Victor Besa for The National

Intercoil, the UAE manufacturer of bedroom furnishings and mattresses, has brushed off the softening retail climate, stepping out of its comfort zone and taking on its first international franchise.

It has also applied for its first international patent in its nascent steps to become a global brand.

The company presently employs about 500 staff with 23 retail outlets and plans for 12 more to open before the end of the year.

“2015 was a slower year for us,” says Hassan Abbas Al Hazeem, the managing director of Intercoil International. He said 2015 saw growth but not at the 20 per cent rate of previous years that had enabled the company to double in size every five years.

“In terms of units, we sold 300,000 mattresses in 2015. Of our total sales, around 25 per cent is to domestic customers [B2C], and the remaining 75 per cent driven by a burgeoning hospitality industry, selling to business [B2B].”

The move towards franchising its “The Bedroom by Intercoil” concept, which will become “The Bedroom”, and the new patent application for its Evolution mattress, are a part of a maturing brand.

Intercoil started life in 1974, just after the formation of the UAE, as a polyurethane manufacturer, called International Foam Factory. It was not until 1999, when Mr Al Hazeem succeeded his father, that the company decided to push into the retail space.

“When I took over in ‘99 we had a factory showroom,” says Mr Al Hazeem. “We had less than 80 people working for us. Intercoil was not really known, it was not present anywhere.”

He says with 75 per cent of the business catering to B2B, Intercoil supplies 10 international hotel groups across the region, who change mattresses every five to seven years, meaning it is an important and lucrative sector for the company and brand.

“However, retail is where you build a brand and slowly we have developed our presence and products to incorporate being the exclusive licensee of US-made mattresses Simmons.

“We fully expect to continue on the growth trajectory of previous years so by 2020 we expect to be twice the size we were last year. We expect our patent application for the Evolution mattress to be issued late 2017,” says Mr Al Hazeem.

The new retail strategy, “The Bedroom by Intercoil” that was introduced at the beginning of the year is a brave move encompassing an A to Z offer on everything that is found in one’s personal boudoir – from lamps, to rugs, to sheets, to pillows and beds, of course.

Its first franchisee, Bobmil Group, which will exclusively manufacture and sell Intercoil’s bedding products in Kenya, marks one of the first manufacturing licensee agreements by a UAE-based business to other countries in the world.

According to Euromonitor the move to a customer-focused business makes sense.

Its research shows the market for bedroom furniture in the UAE grew to Dh1.8 billion during 2015, forming 37 per cent of indoor furniture value sales. The Ace Consumer Survey, meanwhile, showed 46 per cent of its respondents intended to add new furniture to their living rooms and/or bedrooms this year.

The trend can be explained by the replacement cycle of furniture in this country as well as people moving to newer residences.

As well as its new facility in Kenya, Intercoil has also opened a manufacturing centre in Dammam in Saudi Arabia fulfilling the needs of its five showrooms in the kingdom with an eye on the burgeoning tourist industry.

However, when a company moves its operations to satellite manufacturing sites and neighbouring countries, quality, logistics and further cost become an integral factor in the production. The costs of production and the time scale for delivery can often be compromised.

”The biggest differences between GCC countries revolve around the ease of doing business and variations in cost,” says Mr Al Hazeem.

“As far as management of factories go it is about organisational structure and having the right people and systems in place.

“Ensuring best practices are carried out across all factories, instilling accountability, having strong and open communication and frequent reporting between the factory and head office, and the best software which can provide real time data.”

Conquering the logistical and production challenges of manufacture in a foreign country is an organisational problem but changing the personality of a company to a more retail led, customer focused operation is arguably a bigger hurdle.

But just how brave is it moving into an already crowded living-solutions space?

“I am not taking on Ikea because what they sell is simply ‘acceptable’ – what we sell is quality and luxury,” Mr Al Hazeem says. “Dubai is now a brand as aspirational as any other and that is why we are proud to have the Made In the UAE tag on our wares.

“It is definitely a strong selling point for us as both retailers and suppliers to the hospitality industry. Not only are we helping to stimulate the regional economy with job creation and spending, but having UAE-based manufacturing facilities also reduces the likelihood of supply chain delays caused by shipping, while allowing for faster response time, customisation and flexibility that imported brands simply cannot offer.”

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