Sale should put firm on road to recovery

Comment Damas shareholders will get back some of the money raised from the company's initial public offering in 2008 that was funnelled into the hotel project.

Investing in a hotel at the height of the market and selling it near the bottom is not a move any investor would relish. But in effect, this is what the Abdullah brothers, the founders and senior executives of the troubled retailer Damas International, have been forced to do. On the plus side, by selling the Angsana Hotel and Suites, Damas shareholders will get back some of the money raised from the company's initial public offering (IPO) in 2008 that was funnelled into this project.

And swallowing this bitter pill will allow the retailer to exit a sector it entered without shareholder approval that was far removed from its core business. Damas is still fundamentally a good business and one of the leading jewellery chains in the region. These corrective steps will hopefully allow the brand to make the strides into foreign markets promised at the 2008 IPO. But first, it will have to emerge from the dual distractions of an investigation into the US$165 million (Dh606m) of "unauthorised transactions" and a complex debt renegotiation with creditors.

The company ought to be free to concentrate on its promised push into India, the largest gold jewellery market in the world, and strengthening its network of stores in the GCC. This is what the shareholders of Damas deserve, after bearing the cost of an untimely property investment. @Email:[e-mail]