Domestic furniture industry not prepared for global competition

Dubai: The local furniture industry has yet to mature enough to compete with the global furniture brands in the UAE market, said a top furniture retailer.

"Local interior brands are more focused on corporate clients rather retail customers," Jonathan Jagtiani, CEO of Home Centre, told Gulf News in an interview.

The UAE's furniture trade is dominated by local manufacturers and retailers that serve the domestic and regional markets.

Major furniture retailers such as Home Centre and Pan Emirates are trying to develop along the lines of global retailers such as IKEA.

However, they are still local brands and are trying to become regional players by expanding their footprint across the GCC.

Number one

"In terms of business size and turnover," Jonathan says, "Home Centre is number one among furnishing retailers in the UAE market."

He said that Home Centre has very few competitors at its level and it offers value for money across its entire range of products.

"No matter what the budget or variance of taste and customer expectations, it delivers exceptional value in terms of choice and price," Jagtiani added.

UAE manufacturers' designs, output and brand positioning can't be compared with the retailers as most of them design according to contracts with hotels and companies and a significant part of these interiors comprise office furniture, he added.

Home Centre is a mass furnishing retailer with over 50 stores in the GCC, Egypt and the Indian subcontinent that offer furniture, furnishings, home accessories, kitchenware and gift ideas.

Prior to the economic slowdown, the furniture and interiors business benefitted from a six-year boom driven primarily by the real estate and construction boom. Furniture manufacturers raced against time to meet the growing demand.

Worst is over

Jagtiani said that the Dubai market passed through a tough time last year, but the worst is over.

"Since Home Centre proved to be a large business with a solid base over a decade, the effect of the global financial storm on our business has not been that much."

He noted that Home Centre enjoyed good business during the crisis as there was no drop in sales at all.

"Over the past 15 years we have grown up, reaching across the Emirates and beyond.

"Despite the challenges the country and the region faced last year, we managed to maintain our footfall in our stores, where others in the industry saw an approximate 20 per cent decline.

"Yes, we did have a sales drop in some of our stores but at the same time we achieved growth in others. Therefore, we came up with a zero per cent drop in the overall result of Home Centre.

"The growing population in Sharjah, the northern emirates and in Abu Dhabi helped our stores to do well."

For Home Centre, this year is better than last year and obviously there is a lot more happening now in sales promotions which are strong this year.

Recently Home Centre opened the doors to its 11th store in the UAE in Dubai's Mirdif City Centre and Jagtiani said there would be more branch openings in the region and beyond.

"The Mirdif City Centre is a strategically positive move for us, giving Ajman and Sharjah based customers access to the new Home Centre experience."

The retail giant will open a store in Delma Mall in Abu Dhabi later this year along with two stores in Saudi Arabia.

Crisis management

Jagtiani said there are two ways to react to a downturn; stop innovating or invest to corner the market.

"Home Centre opted for the latter and we are confident the investment will pay off."

He added: "We kept the market very strong. We did a lot of marketing campaigns by increasing promotions for new products with reasonable prices."

"We didn't follow what is happening globally on commodities."

Jagtiani said the company never cut prices even though many other stores did. "Everything we sell is branded for Home Centre and specially designed and made for them from 450 sources around the world."

He said: "Our main interest is to make customers feel inspired with new products, new colours and new themes across its 15.000 product range backed by comprehensive standards of service."

Moreover, Jagtiani said the company is aiming to be the biggest and most popular retailer of furniture and homeware across the Middle East, India and every market it enters.

Supporting the UAE efforts to Go Green, Home Centre has also fulfilled its commitment to the environment, producing bio-degradable consumables such as recyclable packaging paper, paper bags and biodegradable plastic shopping bags in all showrooms.

Also, Home Centre offers a number of energy saving products for sale and is about to launch a quick-dry energy saving towel.

Retail Flagship

Launched in the UAE over 15 years ago in 1995, as part of the Landmark Group, Home Centre has emerged as the flagship retail concept of the group, contributing over 30 per cent of the group's business across the region.

With a total of 11 large format showrooms and 1,500 employees nationwide, Home Centre has spread its name.

At 50 stores in the GCC, Egypt and the Indian subcontinent, Home Centre offers the finest furniture, furnishings, home accessories, kitchenware and gift ideas at a medium market prices.