Dubai: BinHendi Enterprises, one of the oldest family-owned businesses in the UAE, has hired the management consultancy McKinsey to restructure the organisation and improve its management, a top official said.
“Every so often we tend to dive into the company and stay there and not come out of it,” said Mohi-Din BinHendi, president of BinHendi Enterprises, told Gulf News. “We wanted professionals to look at our processes, systems and management.”
Hiring the wrong people, especially during the boom years when people flocked to Dubai for jobs, resulted in lost opportunities, he said. But why go for the overhaul now?
“When you hire wrong, the changes of being put into a disadvantage is a definite result; one may lose a lot of opportunities in negotiations,” he added.
While some family businesses have been considering an IPO, BinHendi was adamant this would never be an option. “Not ever in my life — there is no advantage in doing that,” he said. “I’m a free bird. I run the company in the freedom I enjoy.
“I don’t want to go public and have a board of directors asking me. I don’t want to report to people when I can report to myself.”
Although going public can open doors to secure more funding, this was not enough of an incentive. “It will open doors but there are no doors without paying for it in one way or another,” BinHendi said.
“My advice is, if you have a company run it yourself. Nobody is more accountable than the owner of the company. You would be lucky about board members if you get someone who can throw light on the business.”
BinHendi Enterprises plans to expand its F&B outlets such as Japengo and Burj Al Hamam into Fujairah, Abu Dhabi and add more in Dubai this year. F&B and fashion contribute 75 per cent of revenues.
Last year, the F&B segment of the BinHendi business recorded about 20 per cent growth, while other areas ranged from 10 to 15 per cent, he said. The group has introduced 75 international brands to the UAE.
BinHendi is aiming for a 3-4 per cent increase in total revenues this year.
One of the main issues facing the retail industry is of brand owners opening their own stores and bypassing retailers, he said. “It will be very tough…the trend is developing slowly.”
Rents at malls and high-street locations could also grow by about 6-12 per cent and some have already been hiked, he said, which will add to costs.
But “There are healthy margins in luxury and I don’t see anything changing that,” BinHendi said.
Tourism and government investment in broad initiatives like the Mohammad Bin Rashid City will drive opportunities for retailers in Dubai, he said. “To be honest, we’ve just started and we have a long way to go. We’re 41-years old and a lot of opportunities lie in front of us.”
Asked if Dubai has reached a saturation point with the number of malls, he said: “There is an opportunity for more specialised malls but the footfall would not be humungous.”
Will Dubai have the capacity to absorb planned projects including the world’s largest mall?
“Dubai at the time will be in a different league. Dubai changes every two or three years. I’m sure it’s all been detailed and studied and the timing is just right.”
