Al Futtaim seeks to double retail value

Dubai: Al Futtaim Group, the Dubai-based business conglomerate, aims to double the value of its Dh1 billion retail operations in the next three years, fuelled by sales generated from new Ikea and Marks & Spencer openings.

The company is preparing an aggressive Dh250 million investment plan for new outlets of Swedish home-furnishings brand Ikea in Qatar, Oman, Egypt and Dubai over the next three to five years years, said Jim McCallum, group director, retail, at Al-Futtaim.

"We have the territorial rights for Qatar and Oman and are presently working on the practicality of entering the Egyptian market," he told Gulf News.

"Qatar will open in the next two years, but Egypt is harder owing to possible obstacles over import regulations."

Al Futtaim currently runs a single Ikea store in Dubai Festival City, following a location change from Deira City Centre, as well as one outlet in Marina Mall, Abu Dhabi.

"We think that Dubai is a two store market over a five year time scale," he said.

"Regarding location, we mustn't cannibalise the existing business so we would the store an hour's drive time apart. We're looking at a site in the Jebel Ali area, which will experience enormous population growth in the next few years."

Al Futtaim currently runs 76 stores covering 1.2 million square feet of retail space. In addition to Ikea, it owns the GCC franchise rights for Marks & Spencer, Intersport, US brands Toys R Us and ACE Hardware, and various watch and jewellery brands.

"By next months we'll have 80 stores. We're well on the way to doubling the value of the retail business by the end of the decade," said McCallum.

Al Futtaim will open a 64,000 square feet Marks & Spencer outlet, the biggest outside the UK, in Dubai Festival City on Wednesday.

The company will open second stores in Kuwait and Qatar in the next two years, investing approximately Dh50 million.

"These are big potential retail markets for us - they are growing as strongly, and sometimes more strongly, than the UAE," said McCallum. "I believe we can also have at least one more Marks & Spencer store in Dubai."

Intersport, the world's leading sports retailer for retail sales, is the latest addition to Al Futtaim's portfolio. The company will pump Dh40-50 million into rolling out five outlets in the UAE by 2009.

The first will be 1,300 square metre outlet in Dubai's Times Square Mall on Shaikh Zayed Road, which is set to start sales in April following an Dh 8 million investment.