Matalan brings a taste of British lifestyle to Mideast

Dubai: Something very British has come to the Gulf. Clothing and home furnishing store Matalan opened for business in Dubai's Arabian Centre last Thursday. This follows the opening of a store in Oman at the end of June.

The value department store was inaugurated in the Mirdiff mall in the presence of British Consul General Guy Warrington and the chain's founder and owner John Hargreaves.

"If I had said to you ten years ago that Matalan would be sitting in a mall in Dubai you would have laughed, wouldn't you?" Alistair McGeorge, Matalan's CEO, said.

Indeed, Matalan has made some significant changes in its operations in the past decade and its emergence in the Gulf is part of this new strategy.

Three years ago, Matalan came off the London stock exchange as its former owner bought back the company he had established in Preston, England, in 1985. Having not opened a new store in five years, and after a branding face-lift, the chain's bosses have ambitious expansion plans.

Dubai-based Business Trading Company (BTC) is the sole franchisee of Matalan in the Middle East.

BTC's chairman Abdul Aziz Al Babbah said the next store will open in Abu Dhabi in three to four months with others to follow across the Gulf Cooperation Council region, Lebanon and Egypt.

"We plan to open at least two stores a year in the Middle East," Al Babbah said. "Within about five years we will have approximately 20 to 30 shops."

Choosing the Middle East as the chain's first overseas destination reflects the success other brands have experienced in the region, McGeorge said. "Some of our mid-market competitors have got some of their most successful stores out in the Middle East," he added.

Cost-wise, Al Babbah said, Arabian Centre was a less risky proposition. Despite the positive outlook, the company is adopting a cautious approach in its expansion plans. Arabian Centre, being a less high-profile outlet than other malls in Dubai, was chosen to test the waters and see how consumers unfamiliar with the brand react.

"To test the market in Dubai we need to be in a mall focused more on the local side of the population," Al Babbah said. "The expatriates from the UK, they know Matalan."

McGeorge added: "Yes, we want to chase expatriate consumers who know about Matalan and have probably shopped there, but if we could get the local community to buy into the concept as well then there is a far greater chance of having a winning concept."

With over 200 stores in the UK, Matalan has identified 100 more sites on which to place the brand.

"We haven't opened a store in five years, so we'll open three this side of Christmas," McGeorge said. "We'll probably open six to 10 next year and eventually we could open 15 stores a year. We have the capability to do that."

As recession continues to hammer the UK's retail industry, Matalan has performed well over the last 18 months, he said.

"We have grown our profits substantially," he added.

In line with privatisation of the company, the CEO wasn't keen to speculate as to whether the chain's success during tough times was a result of its value for money brand, nor did he reveal new figures.

"The last figures we put out showed that our like-for-like sales were growing nine per cent," he said.

However, he remains anything but upbeat about the UK market in general.

"We've had a lot of unemployment, but I think people are feeling a little more secure about their jobs and if they are feeling more secure they feel more confident to spend their money," McGeorge said.

"But the fundamentals haven't changed. We're heading for three million unemployed so I think the UK market will still be very slow for a number of years."