Dubai: Damas is going back to what it always did best — sell finely-crafted jewellery. And a fresh start can be made after an end to all the distractions the company endured over the last year over its corporate and financial restructurings, said the CEO.
Damas's retail formats will be sharpened to give a new gloss, which will include the phased rollout of more boutique and semi-boutique stores. This would sit well on its future profit margins.
"The two formats are designed specifically for the shopping malls, and in our new retail strategy they are going to be one of the key drivers for growth in the future," said Anan Fakhr Al Deen.
Currently, these two formats represent 12 per cent of the firm's top-line numbers and the CEO said doubling it in the next two to three years is "doable". Consequently, "Our presence in malls will only grow stronger," he added.
As for the existing stores, "We keep looking at new locations and cancel old ones because of the change in direction of the business," he said. "We have so far closed 40 branches in the last 12 months [out of the 420 Damas operated across its whole network]. That's less than 10 per cent, and we are constantly evaluating our requirements.
"We have more or less the right number, keeping in mind that Damas covers all segments. We are present in 18-, 21- and 22-carat jewellery and also in watches. That's one of the key differentiators between us and the others."
Simultaneously, there will be a re-look at the company's presence outside the UAE.
It did that in Saudi Arabia recently with Damas doubling its stake to 98 per cent and taking over operational control.
"Obviously Saudi Arabia is one of the core markets in the GCC for us; in terms of potential it is the fourth largest globally depending on how you look at it, gold or non-gold," the CEO said.
"Under the previous set up we secured a decent market share; but looking at the potential we wanted to be more aggressive. It automatically indicated we have to take full control."
A repeat could be attempted in other overseas territories.
"It's clear we need to restructure our presence outside the UAE; we are present in forms and shapes that are no longer suited to the best interests of Damas. The decisions [on the existing formats] were taken four or five years ago and even before.
"It no longer applies. The past formula where we completely allowed the partners to do business on our behalf is not acceptable any more.
"We are the experts, the leaders and we have the knowledge of even those markets after being in them for many years. We are in the best position to drive the business.
Strategy
Focus on strengths
Even with all the attention lavished on future retail expansion, Damas will continue to be in bullion wholesale. But wholesome changes were brought about even on this side of the business.
"One of the key decisions we took is maximise our operations in wholesale, but under a much stricter credit management policy," said Anan Fakh Al Deen, CEO of Damas. "With the signing of the cascade deal we have closed the chapter on the financial restructuring of the company.
"The only challenge before us is to focus on the core business, which is designing and retailing jewellery. Our financial situation is secure. We are planning for a big year ahead as this year will be our most aggressive ever in the history of Damas marketing — with an approximate increase of 40 per cent in the marketing budget over last year's figures."
