Cosmos Group opts for direct retail presence

Dubai: The Cosmos ITL Group, one of Dubai's oldest privately owned businesses, is to make a full-scale foray into branded textiles and garment retail through an estimated Dh50 million to Dh100 million investment. It will be done in association with a prominent Indian brand rather than by developing one of its own, which would have made it a more costly exercise.

Currently, trade in textiles generates 60 per cent of the group's turnover, which was deemed the prime factor in the decision to go for a direct retail presence. The plans are to go for mall locations in Dubai, Abu Dhabi and Sharjah.

After having gone through its share of blips in the past decade, the local textile sector is again starting to sport vibrant hues, aided by sustained domestic demand as well as from the major re-export markets. The upturn is prompting some of the biggest wholesalers to derive more out of retail, which is where Cosmos ITL — marking its 60th year of operations next year — is headed.

The move to get into textile retail has also been prompted by the decline in revenue from the group's interests in electronics, which includes a distributor relationship with Japan's Sharp since the early 1960s. It is also a nod to the fact that consumer preferences in the electronics space have solidified over a handful of select brands.

Ram Buxani, president of Cosmos ITL, acknowledges as much. "Only recently three of the top Japanese electronic makers announced cumulative losses of $20 billion," he said. "If the makers have lost such amounts, distributors here are not going to be spared.

"The overall market share of Japanese brands vis-a-vis demand for electronics in the UAE has shrunk by about 70 per cent. Thus against their near 100 per cent in the past, the share has gone down to 30 per cent."

According to Buxani manufacturers are compounding the problem by competing with the official distributors.

So what will any of this mean for the group's association with Sharp? (One of the biggest names in the audio-visual global firmament, Sharp posted a 376 billion yen (Dh17 billion) loss in its last financial year, which ended March 31.)

"In a volatile market where manufacturers have openly declared huge losses, we are searching for a win-win formula," said Buxani. "The 50-year relationship may require some plastering and painting here and there. That is being taken care of."

Headquarters: Time for a makeover

The Cosmos ITL Group owns one of the most valuable pieces of real estate in Bur Dubai, where its headquarters exist. Now the time has come for a makeover of the building, according to the president of the group. "We realise the present look is quite dated and we should sync it with the present times and for the immediate future," Ram Buxani said.