When the going gets tough, Matalan gets busy growing

The UK-based department store chain opens its second outlet in Dubai

Dubai may be known for its luxurious tastes, but the UK budget fashion brand Matalan is banking on its pocket-friendly styles luring local shoppers in tougher economic times. The UK-based department store chain officially opened its second outlet in Dubai yesterday, one of its four stores across the Middle East. But Matalan did fluff up its appearance for the regional crowd. The company worked with a UK interior designer to make its regional store look more upmarket than in its home country, said Hasit Kakkad, the retail manager for Business Trading Company (BTC), which has the regional franchise.

"We've improved the presentation because we know the local Emirati customer wants a more luxurious environment," Mr Kakkad said. Retail sales in the UAE fell last year after the onset of the economic downturn, as people became more careful with their cash. Consumer confidence in the Emirates fell steeply last year due to worries over job security and anxiety over personal finances, data from Nielsen showed.

That confidence is recovering but is not back to the peaks of 2008, the latest Nielsen reading, taken in March, shows. Shoppers would continue to be cautious with their buying, the company said, but may spend on luxuries such as travel that they had been holding out on. Matalan is expecting consumers in the region to remain price-sensitive, and with BTC, plans to open 30 stores across the region in the next five years, Mr Kakkad said.

"We know from America and from Europe the recession was only going to be more and more global," he said. "And as we realised that customers became more value-conscious, we then grew out our expansion plans." Globally, Matalan has about 120 stores, mainly in the UK. In addition to the 31,000 square foot store it opened in Lamcy Plaza yesterday, the retailer already has a 19,000 sq ft store in Arabian Centre in the Mirdif area of Dubai. It plans to open at least two more within the next 18 months, said Mr Kakkad.

Matalan also has a store in Abu Dhabi's Dalma Mall in Musaffah, and plans to add three or four more outlets in the capital, he said. The group's first store in the region opened in Jordan in June last year. [e-mail]