Alhokair to expand in Central Asia

Dubai: Alhokair Fashion Retail, the Saudi Arabia-based retail conglomerate which has over 80 international brands in its portfolio, has embarked on aggressive expansion into Central Asia.

The company, which owns 50 per cent of the Saudi Arabian mid-end retail market, is looking to own up to 75 per cent of Central Asia's mid-end retail segment in countries such as Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia. By the end of their initial three-year expansion, they are looking to have 350 to 400 stores in the region, which is predicted to boost their retail business to 9 billion Saudi riyals (Dh8.81 billion). By the end of 2011, the retail arm of Alhokair is expected to be valued at 3.8 billion riyals.

"We got caught with the UAE as a group. We came after the party had finished. For the first year or two it was all right, because the wave was still riding in, but unfortunately it crashed," said Simon Marshall, CEO of Fawaz Alhokair at the InRetail Summit which started yesterday and continues until tomorrow.

"When markets tighten, it's the secondary brands that get hit hardest. Because we had arrived late in the boom we were only able to secure second-hand rates and commitments to high rents. When we set out our international strategy, we did not want to make the same mistake. We then looked at markets we believed were truly emerging," Marshall added.

"When you got to Central Asia you find economies that are growing rapidly missing a retail solution. We see that as an opportunity to go into these markets with all our brands," he said.

Alhokair currently has 28 outlets open in Khazakstan, with an additional 32 to open in four months. According to Marshall, sales have been good in the stores that are already open, with a higher sales-per-square-metre rate than their European counterparts.

Nine stores are set to open in Baku in November and a further 37 will open in April next year in their mall "28 Steps". In Georgia, nine stores are due to open in January. In April, 44 brands will be launched in the mall "Uptown Tbilisi". During the same month, 28 stores will be opened in Belarus and 41 stores in Amman, Jordan. The brands introduced in Central Asia will be a mixture of the top-performing brands in their portfolio, including Marks and Spencer, Aldo, Nine West and Monsoon.

In North Africa, Alhokair plans to expand in Morocco, Algeria and Libya. The company is also looking to explore the luxury market.