Fred Watts |
In 1998, the promoters announced plans for an ambitious Dh1 billion expansion, which would give the mall a makeover of epic proportions. It was also designed to consolidate Al Ghurair City's position just as the retail sector was moving on to a next phase of development.
By 1999-2000, competition among malls had become intense, and there was a perception that AGC might be losing out. There were delays in the completion of the expansion, and, in between, the original plans were changed.
The newer, and more aggressive, malls were muscling into the retail territory and carving up AGC's once unassailable market share.
It was early this year that Fred Watts — who had a meritorious 23-year stint with the Edgars Group in South Africa, including ten years as a director, and at Lamcy Plaza in Dubai — was brought in to effect a turnaround in his capacity as general manager.
In an exclusive interview to Gulf News, Watts lists out some of the strategies that have been put in place since then, and how these are paying off.
What was your immediate priority on taking over at AGC?
There is no doubt that in the past three years, or even prior to that, the old management had lost the plot for one reason or the other. A few decisions were made and implemented that proved to be not fully focussed.
For over two-and-a-half years, anyone coming to the mall could see it was a big construction site. It was enough for any consumer to lose confidence in the product.
My challenge, and that of the new team's, was to regain the confidence of the retailer and of the consumer. We had to put together all the vital components that would help the process, including a very aggressive marketing strategy.
AGC as a product is still solid and comes off a very strong background. I believe that AGC's potential was the best-kept secret in Dubai, and that is what we are highlighting. There is no holding back any more.
There is a worldwide change that is happening in the retail area and coming to Dubai — that of neighbourhood shopping.
AGC's location is a key factor — the future of Deira is so important to Dubai. There will come a stage when the entire area will be revitalised. The demographics too are in transition. AGC's current moves ensure we will be ready when that happens.
How would you assess the results so far?
It is very important for the mall management to have confidence in its retailers and vice-versa.
Our recent promotions have translated into higher traffic, and running at 20-28 per cent growth on a daily basis.
The numbers are between 16,000 and 17,000 on weekdays, and going up to 25,000 to 28,000 on weekends. More importantly, all lease renewals which have come up in the last three months have been completed. Current retail space taken up is 86 per cent.
In December, Spinneys will open its 45,000 square foot supermarket, and another big gap will be filled with the eight-screen cineplex coming up at the same time.
There is still one more gap remaining, and that is in entertainment. That is the only worrying aspect. I am working on it. We have the land on either side to take up any expansion necessary to add the entertainment facilities.
How are the apartments doing?
The mall is reporting a 90 per cent occupancy at its 350 apartments, which were recently renovated at a cost of Dh180 million. We had, however, dropped plans to develop two blocks, for commercial and residential purposes as part of the original AGC expansion. There was an over supply situation on the commercial space front, and we felt it was not the time to go ahead with it.
What are your targets for AGC over a longer term?
Any business will be affected by management changes. The point is to have the ability to settle down as quickly as possible. It would have been more difficult for an absolute newcomer to this market to come in and make changes.
My first goal was to get the retail mix correct, and that has been achieved to a great extent. There is no doubt that in the last three months, the mall has had people coming in who would never have thought of doing so in the past.
There is no doubt that Deira City Centre is the market leader and has its mix just right.
However, there is a race on for the silver, and it is our intention to be on the podium for that.
Over the next 18 to 24 months, it is my intention to get AGC back to being as big and strong as it was in the early 1990s. From a marketing stance we are focused on building the brand "Al Ghurair " as a new entity in the retail market, projecting a young vibrant image.
What are your plans for the future?
We will shortly conduct a feasibility study to determine whether to go in for another expansion. As per current plans, we see the need to develop a physical structure of between 400,000 and 450,000 square feet, including two levels of basement parking, adjoining the existing mall.
The proposed facility will be used primarily for the middle market brands and outlets, while the main mall will cater to the upper and upper medium clientele. Such an expansion would entail investments of about Dh200 million.
These are early days yet. It would all depend on the findings from the feasibility report. It would be six months to a year before a decision is taken. The management already has the land on either side of the mall, which can be used for any expansion. The new facility would be part of the overall AGC brand, and retain strong linkages.
The main mall has a total developed area of 470,000 square feet.
