With the luxury retails sector in Middle East growing by leaps and bounds, Mr Fawzi Al-Kadi, CEO of Four Corner Enterprises, takes a bite of the fresh apple and shares his views
By: Karishma Parkash
Posted on: April 10, 2011
With a bird eye’s view on the luxury retail sector in the Middle East, and with good reason of course, Mr Fawzi Al Kadi, CEO, Four Corners Enterprises, sees it shining and how. “I believe the economic growth in the past five years has changed the retail market in the Middle East and especially the GCC. High per capita disposable incomes means higher consumer purchasing power, which means a noticeable growth in local SMEs. Established firms have also diversified their operations into a more lean structure within the retail sector,” he shares. As per Mr Al-Kadi, the Saudi retail market is set to grow by 12 per cent annually in the next five years - that’s the fastest growing market behind China!
Having being in the retail business since 1990s, Mr Al-Kadi’s company, FFK Enterprises, started with the automotive industry. He operates The Land Rover Center - the largest independent Land Rover dealership in GCC, catering to HNIs in the ever-growing MENA region. The company is also the exclusive importer of Arden Automobilbau with stocks of Hamann, Kahn Design, Overfinch and more. Mr Al-Kadi is set to take the Middle East retail scenario by a storm with his next venture, Four Corners Enterprises – which we discussed later after gaining a little understanding of the Middle East luxury market.
Just one push
Talking about the driving growth factors in the Middle East luxury retail sector, Mr Al-Kadi pointed out that per capita income has to be supplemented by availability of luxury brands. Not all international luxury brands were available in all countries. But today, most of the major brands have not one, but several branches in a city!
Another important issue is the designs and product offerings. Years ago, many collections, in fashion for example, were not suitable for the area. The result? Many luxury brand re-sellers were reluctant to bring in a wider range of that season’s collection. Few names captured the lion’s share in the luxury market with consumers only fixated on a couple of brands. Today, these very sophisticated consumers, who were young five years ago, are now job holders with money to spend. “These consumers have a drive to purchase luxury products and are not driven by what the luxury brands dictate. They have a mind of their own,” says Mr Al-Kadi.
Different ball game
Always the ones with the ball in their court, Mr Al-Kadi does not undermine today’s consumers and points them out to be rather sophisticated and demanding. A noticeable expansion in promotion and advertising will aid retailers in reaching out to the correct targets.
But he also cautions against head-to-toe walking advertisements! Due to the consumers’ higher sophistication levels, Mr Al-Kadi observes that for them it is all about fitting the brand into their own style rather than fitting themselves into the brand’s image. Luxury is becoming more of a personal touch rather than draping yourself with the brand’s logo. Commercializing the products for such a class of consumers isn’t the key. “Not everything expensive is necessarily good. When you see affluent buyers flip clothing inside out, to check the stitching for example, you know that the purchasing mentality is different now,” he observes.
Although Mr Al-Kadi doesn’t see much difference between consumers in Middle East as compared to across the globe, he does make a point - “I think shoppers here are a bit more loyal when it comes to certain brands and quality of service. That’s why you see more brands going belly-up when their level of service goes down. I also think they are picky when it comes to styles and personal touches.”.
The current unrest in Middle East might have some implications on the region’s luxury consumer behaviour. Luxury brand managers are keenly watching the market and sensing, or hoping to see, an increase in luxury purchases once the middle class in free from oppression. Mr Al-Kadi also agrees, but attaches a side note as well. “I think the industry will only grow when there is an inflow of new consumers. I think it’s more about the socio-economic situation in the luxury segment rather than the way people are governed. The results, however, will not be felt immediately due to the fact that most of these areas are in need for basic personal goods before moving into the luxury segment. But I do see it happening,” he says.
Broadly comparing the Middle East and the rest of the globe, Mr Al-Kadi believes that the mall culture offers a complete shopping experience vis a vis a street experience. “I believe each offers a different experience. A short stroll in Dubai Mall’s fashion avenue surrounds you with every brand worth visiting - so does New Bond Street or Sloane St. But there’s something about malls that’s different. It’s a bit more intimate with a lot less pressure to buy,” he says.
Customer service is major issue pointed by Mr Al-Kadi, and correctly may I add. Remember the times that you have been x-rayed by the salesperson in a luxury brand store? Add to that frowning security guards, and the salesperson’s utter trauma if you do not purchase THE most expensive item in the store. According to Mr Al-Kadi, “It seems that unless you are rude, or immediately aim for the most expensive item in the store, there’s no one home – not even a distant smile!” Unpleasant, isn’t it? There is a difference in customer service among major brands all around the globe, and he is attempting to understand it so as to present a perfect answer to the luxury consumers of the world – Four Corners Enterprises.
A changing scene
A part of Four Corners Enterprises, Mr Al-Kadi’s latest baby, called Abbellire, is a soon to be launched chain of high-end boutiques which will change the way luxury shopping is perceived. The first store will be located in Al Rashid Mall, Saudi Arabia, whose Fashion Avenue is the most prestigious in the area and carries names like Cartier, Versace, Pal Zileri, Alviero Martini, RobertoCavalli, and more.
Confidently enough, Mr Al-Kadi credits his clients and hopes that they will change the scene of luxury shopping while he can simply provide a platform. “We are betting on the sophistication levels of potential buyers. We are trying to do the opposite of what all the big names are doing or not doing. We are not here to impress our clients with decorations or uniformed sales staff - but believe that luxury and intimate, personalized service go hand in hand,” he explained. He aims to concentrate on quality, fashionable names that do not have enough exposure in the Middle East, but should. Thus they partner with names that are still dedicated to style and workmanship, and not necessarily scale.
Interestingly, Four Corners came into existence after Mr Al-Kadi and his brother Fahad followed their wives during their shopping trips. What do they notice? Extreme emotions with regard to the level of service they were offered at a store. Taking from their women’s comments, the idea of their boutique was formed. “Why weren’t they happy even after buying an expensive product? Why were they ignored? Who do they think they are? High-paying customers are hard to find. Competing stores are lined up left and right. All these were questions raised after almost every stop. To me, these questions provided their own answers instantly. Feedback from friends and friends of friends cemented the idea immediately,” he says.
Slow, but steady
Mr Al-Kadi assures that several fashion houses will be carried in their first phase. Quality names, such as Maria Grachvogel, Anne Valerie Hash, Britta von Basedow, Kinder Aggugini, Emilio de la Morena, Harry Halim, Charles Anastase and Sophia Kokosalaki are a few names that will be available from the opening day. The boutique will not only cater to RTW clients, but offer a distinctive mix that includes lingerie, shirts and shoes. Aruna Seth, Alessio Spinelli, The Shirt Company, Fleur of England, will all be there.
“These names were handpicked. Most importantly, they are fresh and classic at the same time. There’s something about them that makes me envy women and the choices of products they have. If I can offer our clients a complete stop for their high-end needs I’ll be a happy man!” he says excitedly.
Apart from the first store in Al Rashid mall, the initial phase will be slow. “Dictating what’s in demand and what’s not is the client’s job while we just want to concentrate on brand equity,” he points. Emphasing that they are a stage for the brands and a show for their clients, their aim is to re-package only. “Once that is established, we plan to move into two other major cities in Saudi Arabia - Riyadh and Jeddah. Although purchasing power in these cities overshadows other cities in the area, the plan is to offer our services to the rest of the Gulf soon after."