Dubai
Retailer Marka aims to be profitable in the fourth quarter of 2015 as it expects to make five to six acquisitions this year, according to the company’s top executive.
Nick Peel, chief executive of Marka, which listed on the Dubai Financial Market in September last year, said that the acquisitions would be funded though a combination of banks and its own funds. He declined to say how much the company is investing in acquisitions this year.
Speaking to reporters yesterday, Peel said that the company was in advanced stages of discussions for some of the acquisitions. It expects to make a couple of acquisitions in the sports sector, he said, adding that he expects “those to come into fruition sometime in the next three to six months.”
The company is also eyeing four acquisitions in the food and beverages sector, with two expected to be completed by the end of April and the other two in the first half of 2015. The retailer has already signed agreements with seven fashion brands.
Marka is focusing on growing in the sports, fashion and food and beverage segments of the retail market.
Speaking about the company’s acquisition strategy, Peel said that it is looking at “small, modest sized businesses” with strong revenue and EBITDA [earnings before interest, taxes, depreciation and amortisation].
Marka has a 3-5 year acquisition plan, with a focus on the UAE in the first year and potentially the second, the Gulf in the second and third years, and the international markets in years three to five, Peel said.
“We will truly have between four and five brands that have international opportunities and scalability,” he said.
In Dubai, the retailer expects to open a Taste of Italy store in Galleria Mall on Al Wasl Road in March this year, and a Harper’s Bazaar cafe in the Dubai Design District in May.
It also plans to open six more Modell’s Sporting Goods stores in the region in the next two years.
“We have no aspirations to be the biggest in the region. We have no aspirations to secure and work with 50, 60 and 70 brands,” Peel said.
The company agreed last year to acquire Retailcorp, a subsidiary of Istithmar World, which is part of government-owned Dubai World, for more than Dh220 million. The deal allows Marka to own 15 sporting goods outlets and have rights to sell products by brands such as Nike, Reebok and adidas in locations including Mall of the Emirates, Mirdif City Centre, Ibn Battuta Mall, Abu Dhabi Mall and Al Ain Mall.
Marka expects Retailcorp’s operations to be handed over on April 1 this year.
It anticipates Retailcorp to earn revenue in excess of Dh200 million this year and an EBITDA of Dh20 million, according to Peel.
