Makeover for growth plans

The Life: Companies in the interior design industry are trying to avoid slumps to certain segments of their business. Here is how they are adapting.

Dougall Harvison, the general manager of Bluehaus, says many shops are now refurbishing and rebranding their stores.

Players in the local interior design industry are jockeying for a safe position in the market as the global economy threatens the growth of their business.

Spending on rugs, sofas and items for both commercial and residential properties in the Gulf is projected to increase 26 per cent this year.

This is up from US$4.5 billion (Dh16.52bn) last year, according to a report released this month by Ventures Middle East, a consultancy and organisers of the International Design Exhibition (Index) in Dubai, which ends today.

But while the UAE is expected to benefit from the highest interior design spending in hotels and retail shops in the Gulf this year, local businesses could be negatively affected in some areas if the global economy slips into a second dip, experts warn.

"If we work on the basis the world is not going to get any better anytime soon, it's that aspirational user that is the one that's going to cut back," says Paula Al Chami, the event director for Index.

"As much as they aspire to have their homes or developments at the same level [as the luxury market], they simply can't afford it anymore. They're usually the mass consumer, and that's where we don't see anything improving."

Some local shops are targeting nearby countries or specific sectors to avoid getting stung like they did during the last downturn.

"We've had a challenging three years," says Shahriar Khodjasteh, the group marketing director for Al Aqili Furnishings, which has about 1,000 employees and is one of the largest flooring and furnishing specialists in the country.

After weighing up whether to cut staff numbers or reduce salaries during the recession, executives at Al Aqili decided instead to slash their marketing budget and pull out of major regional exhibitions.

This is the first year since 2008 that Al Aqili has returned to Index to display its wares, and it is focusing more on expanding to other parts of the Gulf. It now has more than 15 showrooms in the region, including a 15,000 square foot space that recently opened in Doha.

"We realised what we needed to do is increase our market share in other GCC markets," says Mr Khodjasteh. The company plans to open an office in Bahrain, in addition to its existing branches in Qatar, Kuwait, Oman and headquarters in the UAE.

"This is the beauty of the Gulf area: [if] one place will be slower, you'll have other places to work on," says Farida Kamber Al Awadhi, the president of the Association of Professional Interior Designers in the UAE.

Some companies that assist with fit-outs and redesigning interiors are focusing on specific sectors in the UAE that have seen an increase in sales.

Bluehaus Group, which has a presence in Abu Dhabi, Dubai and Oman, says more multinational companies are taking advantage of falling rents and consolidating multiple offices in the Emirates into a single location.

These central offices typically save companies money, part of which then gets routed to redecorating expenses, says Dougall Harvison, the general manager of Bluehaus.

Mr Harvison says that a growing number of retail shops are taking the opportunity to refurbish and rebrand their stores.

In these two segments of the market "we're still seeing a bit of an upswing", says Mr Harvison.