Abu Dhabi: Apparel Group, the Dubai-based retail conglomerate, is set to invest at least $120 million in capital expenditure to open 300 stores globally in 2016, with plans to enter the Iranian market by the end of 2017.

The company is also looking to grow its geographical footprint in the GCC, Africa, and Asia. It currently as 1,200 stores and plans to have 1,500 by the end of this year.

Nilesh Ved, chairman of Apparel Group, said the company was in talks with some brands with which it already has franchise agreements to enter the Iranian market, but was still waiting for their confirmation. Ved was speaking on Wednesday at the opening ceremony of Apparel Group’s latest store, Shoe Gallery in Abu Dhabi’s Yas Mall.

“[Iran] is a big market. Everybody’s looking at it, but until we get a green light, we’re not going there, so we want to make sure everything is settled before we jump in. We’re studying the market, but we’re not in talks with anyone. We have plans to get in once the market opens up.

Everybody is studying and creating their strategies [on Iran] but nobody wants to take off; it’s a wait-and-watch strategy,” he said.

In an interview with Gulf News, Ved said Apparel Group has a long-term view on Iran, and the country was definitely on their radar.

Geographical expansion:

The group is already present in 14 countries and plans to have presence in at least 25 countries by 2020 by tapping into new markets particularly in Africa.

“We’re just getting into South Africa — we’re just acquiring a company and we should be there by March. Getting into South Africa will open the doors for us in Sub-Saharan [Africa]. By 2018, we should be in Kenya and Nigeria.

[Much] of our growth is going to come from Saudi Arabia, Our growth is also going to be looking at markets like Egypt,” the chairman said.

He added that Apparel Group plans to expand in India and Indonesia — both of which it is already present in. In India, Apparel Group plans to add 30 stores in 2016, while in the GCC, it plans to add a total of 100 stores this year.

The group is also looking at bringing new brands, with plans to add five new ones in 2016. Currently, it has 55 brands under its belt including Tommy Hilfiger, Aldo, Nine west, Aeropostale, Calvin Klein, Toms, Kenneth Cole, and Tim Hortons, among others.

Acquisitions:

To accelerate its expansion plans, Apparel Group is eyeing acquisitions, with the chairman saying they “are talking to several people in the Gulf region.” He declined to disclose further details but said an announcement should be made in about six months about an acquisition.

Macroeconomic challenges

With a challenging macroeconomic environment on the back of lower oil prices and the resulting impact on consumer spending, Ved said that such an environment was ideal for growth.

“I grew my business after 2001, which was after 9/11, and then after 2008 when the recession happened, so every time we get an opportunity like that, it’s the only time when we can grow; that’s the only time you get reasonable deals. Rentals are reasonable at that time and if you’re serious, you’ll be able to grow,” he said.

Ved pointed that such challenges in the economy mean consumers cut down spending on luxury items in favour of mid-market products, which is exactly the segment Apparel Group operates in.

Similarly, real estate developers halt or slowdown expansion plans, which means valuations on properties become more attractive.

In 2015, Apparel’s same-store sales grew 6.7 per cent. In 2014, however, sales growth was in the double digits. Ved said he expected to continue seeing growth in 2016, albeit as single digit growth in same-store sales.