Marka shareholders have voted to sell the company’s majority stake in Dubai-based children’s indoor play area operator Cheeky Monkeys as the weak retail market continues to pile pressure on the loss-making company.
The Dubai-listed retail company said that it had agreed to sell the share in Cheeky Monkeys Management Services at the company’s annual general meeting on Sunday.
In a statement to the Dubai Financial Market, Jamal Al Hai, Marka’s chairman, said shareholders had approved a special resolution to sell the company’s 60 per cent stake in Cheeky Monkeys, just two years after purchasing it for Dh30 million.
Marka bought its stake in Cheeky Monkeys Playland and Sweet Surprises in April 2015 with ambitious plans to expand the edutainment brand, located in Al Barsha, Mirdif, Jumeirah Beach Residence and J3 Mall on Al Wasl Road.
Since then Marka has expanded the brand to Al Naeem Mall in Ras Al Khaimah and pursued a franchise agreement to expand it into Dammam, Jeddah and Riyadh.
Set up by UAE businessmen, Marka listed as a greenfield company in 2014 with no track record but with a promise to enable small investors to buy a slice of what, at the time, was the UAE’s booming retail and dining industries.
Since its IPO, Marka, the first UAE-based retail company listed on the Dubai Financial Market, has struggled to turn a profit as the retail market in the UAE has been hit hard by the strong US dollar, to which the dirham is pegged, making the country an expensive destination for tourists from regions such as Europe, while a slower economy is also affecting the purchasing power of residents.
The retail market is also being challenged by the rise of e-commerce sites, which are eating away at the revenue of companies that have missed out on digital retail.
In February, Marka said it planned to rejig its portfolio of brands and continue with a programme of “extensive cost-cutting” after posting a second annual loss and missing its target to be in the black after two and a half years’ trading. Nick Peel resigned in December as chief executive without giving a reason.
“The slowdown in the rate of economic growth and the strength of the US dollar are the major drivers behind weakening retail sentiment,” said Craig Plumb, the head of research in JLL’s Dubai office.
lbarnard@thenational.ae
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