Joint ventures to the fore in distributor space

Dubai: The time-tested distribution and retail arrangements in the local marketplace are being given a fresh look. Through a newly forged deal, two of the leading names in the eyewear distribution and retail channels are joining forces.

Part of Hassan’s Optical Company, Dubai-based Derivision has entered a joint venture with Yateem Group to offer a platform for the upscale eyewear brands owned by Italy’s De Rigo Group, which has a portfolio of own and licensed labels such as Police, Chopard, Givenchy and Ermenegildo Zegna.

The joint venture will look to scale up exposure through its network of 130 outlets as well as widen it reach further in the region.

Also, the De Rigo Group could pick up a stake in the joint venture, a decision which needs to be made by July 31. “Our strong relationship with Yateem and Hassan’s Opticals will strategically step up our distribution base in the Middle East market broadening our potential,” said Michele Aracri, managing director of De Rigo Group.

But where is the strategic fit for Hassan’s Opticals and Yateem from coming together? “We have vertically integrated our business downward with retail powerhouses and upward with the manufacturer,” said M. S. Reddy, general manager, Derivision. “By integrating our business we have 135 stores from our joint venture partner in the GCC with dedicated space for our brands; product launches, marketing initiatives and standardised pricing policy will prove beneficial as regional policies.

“We are now in a comfortable position to design, develop and market customized products with the right fit, size and shape of eyewear.”

Distribution arrangements

If De Rigo Group joins in, it will be yet another instance of brand principals in the global luxury business going for an alliance with local partners. Yves Saint Laurent (YSL) did so recently with Al Tayer Insignia, which also has a partnership with Prada.

At the same time, there are brands which are taking direct control of their distribution arrangements in the region.

“There are two ways you can enter a market - either having distribution agreements or establishing an office directly as in the case of Maui Jim (the American eyewear brand),” said Reddy.

“However, some of the companies who have put their foot in the Middle East are having distributors and servicing the key accounts. We had an opportunity to prove to the shareholders and the principles by creating success stories with brands like Chopard, Givenchy and Police.

“We grew our business year-on-year by a minimum of 22 per cent during the turbulent period of the economic downturn. Keeping in mind these facts, De Rigo has confirmed a partnership with equity which we will leverage to benefit the company.”