Saudi Arabia's biggest retailer is pulling out of Dubai after complaining of rising rents in the emirate's most popular malls.
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Retail Group Gulf, which is majority owned by the Fawaz Alhokair Group based in Riyadh, has closed more than 40 stores in Dubai and sold a number of its franchise agreements to other retailers.
It had stores in some of the emirate's biggest shopping centres, including Dubai Mall, Ibn Battuta and Dubai Festival City.
"Basically, given the recent trading over the last few years, the decision was made collectively by the shareholders to exit the market as the leases come to expiry," said Simon Marshall, the chief executive of Fawaz Alhokair.
Retail Group Gulf was the franchisee for 19 brands, including New Yorker, la Vie en Rose, Cortefiel and Club Monaco, and leased stores across Dubai. Fawaz Alhokair is one on the biggest retailers in the Middle East with more than 1,000 stores and the company runs numerous brands such as Marks & Spencer, Zara, Gap and Promod in Saudi Arabia. It holds about a 50 per cent share of the fashion segment in the kingdom. Mr Marshall said Dubai was now a "lose-lose" situation for many retailers as high rents damage margins.
"There's two sides to Dubai," he said. "There's a side where you have malls that are offering good rental rates but don't get the footfall to support the model and then you have malls that are getting the footfall but, because of the rates, don't support the model either. It's a bit of a lose-lose at this moment in time." Average retail rental rates remained stable in the first nine months of this year across malls, community developments, boutiques and convenience stores, at an average of Dh1,884 (US$512.90) a square metre, while mall rents remain much higher at more than Dh2,750 a sq metre, according to the property consultant Jones Lang LaSalle.
David Macadam, the head of retail for the Middle East and North Africa region at Jones Lang LaSalle, said rents at Dubai's most popular shopping centres, such as Dubai Mall and Mall of the Emirates, were about 20 per cent higher than at neighbouring malls.
The amount of rent paid was usually a combination of a base level and a percentage of annual sales, Mr Macadam said, so a store's products had to be strong to ensure profitability.
"It's not just about the rents, it also about your product offering, the service and the shopping experience inside the store."
Shopping centres such as Dubai Mall and Mall of the Emirates have experienced big increases in the numbers of local shoppers and tourists this year as consumer confidence has quickly returned in the UAE.
But older, smaller malls have been left trying to catch up and are now investing billions of dirhams in expansion plans and rejigging their portfolio of stores and entertainment options to attract customers. Management at both BurJuman and Al Ghurair Centre are investing heavily in increasing the size of their malls.
Retail Group Gulf's departure seems contrary to the performance of the overall market, with retail sales figures strong across Dubai this year and many brands reporting double-digit growth on last year.
However, analysts have warned that increasing rental rates could squeeze margins for smaller players in Dubai, such as Retail.
Companies that are the franchisee for just a few brands cannot negotiate the same rents as major retailers, while companies such as Landmark Group, MH Alshaya, Apparel and Azadea can demand more favourable rents because they offer malls a wider range of fashion brands as well as more choice on food and beverage. These companies can look after up to 50 brands in the Middle East.
Stuart Gissing, a director at Colliers International, the property consultancy, believes the smaller retailers with fewer brand franchisees have a vital role to play in keeping a diverse array of retail brands in the market, rather than just dominant names owned by major local retailers.
rjones@thenational.ae
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
The Birkin bag is made by Hermès.
It is named after actress and singer Jane Birkin
Noone from Hermès will go on record to say how much a new Birkin costs, how long one would have to wait to get one, and how many bags are actually made each year.
Brief scores:
Day 2
England: 277 & 19-0
West Indies: 154
Attacks on Egypt’s long rooted Copts
Egypt’s Copts belong to one of the world’s oldest Christian communities, with Mark the Evangelist credited with founding their church around 300 AD. Orthodox Christians account for the overwhelming majority of Christians in Egypt, with the rest mainly made up of Greek Orthodox, Catholics and Anglicans.
The community accounts for some 10 per cent of Egypt’s 100 million people, with the largest concentrations of Christians found in Cairo, Alexandria and the provinces of Minya and Assiut south of Cairo.
Egypt’s Christians have had a somewhat turbulent history in the Muslim majority Arab nation, with the community occasionally suffering outright persecution but generally living in peace with their Muslim compatriots. But radical Muslims who have first emerged in the 1970s have whipped up anti-Christian sentiments, something that has, in turn, led to an upsurge in attacks against their places of worship, church-linked facilities as well as their businesses and homes.
More recently, ISIS has vowed to go after the Christians, claiming responsibility for a series of attacks against churches packed with worshippers starting December 2016.
The discrimination many Christians complain about and the shift towards religious conservatism by many Egyptian Muslims over the last 50 years have forced hundreds of thousands of Christians to migrate, starting new lives in growing communities in places as far afield as Australia, Canada and the United States.
Here is a look at major attacks against Egypt's Coptic Christians in recent years:
November 2: Masked gunmen riding pickup trucks opened fire on three buses carrying pilgrims to the remote desert monastery of St. Samuel the Confessor south of Cairo, killing 7 and wounding about 20. IS claimed responsibility for the attack.
May 26, 2017: Masked militants riding in three all-terrain cars open fire on a bus carrying pilgrims on their way to the Monastery of St. Samuel the Confessor, killing 29 and wounding 22. ISIS claimed responsibility for the attack.
April 2017: Twin attacks by suicide bombers hit churches in the coastal city of Alexandria and the Nile Delta city of Tanta. At least 43 people are killed and scores of worshippers injured in the Palm Sunday attack, which narrowly missed a ceremony presided over by Pope Tawadros II, spiritual leader of Egypt Orthodox Copts, in Alexandria's St. Mark's Cathedral. ISIS claimed responsibility for the attacks.
February 2017: Hundreds of Egyptian Christians flee their homes in the northern part of the Sinai Peninsula, fearing attacks by ISIS. The group's North Sinai affiliate had killed at least seven Coptic Christians in the restive peninsula in less than a month.
December 2016: A bombing at a chapel adjacent to Egypt's main Coptic Christian cathedral in Cairo kills 30 people and wounds dozens during Sunday Mass in one of the deadliest attacks carried out against the religious minority in recent memory. ISIS claimed responsibility.
July 2016: Pope Tawadros II says that since 2013 there were 37 sectarian attacks on Christians in Egypt, nearly one incident a month. A Muslim mob stabs to death a 27-year-old Coptic Christian man, Fam Khalaf, in the central city of Minya over a personal feud.
May 2016: A Muslim mob ransacks and torches seven Christian homes in Minya after rumours spread that a Christian man had an affair with a Muslim woman. The elderly mother of the Christian man was stripped naked and dragged through a street by the mob.
New Year's Eve 2011: A bomb explodes in a Coptic Christian church in Alexandria as worshippers leave after a midnight mass, killing more than 20 people.
U19 WORLD CUP, WEST INDIES
UAE group fixtures (all in St Kitts)
- Saturday 15 January: UAE beat Canada by 49 runs
- Thursday 20 January: v England
- Saturday 22 January: v Bangladesh
UAE squad:
Alishan Sharafu (captain), Shival Bawa, Jash Giyanani, Sailles
Jaishankar, Nilansh Keswani, Aayan Khan, Punya Mehra, Ali Naseer, Ronak Panoly,
Dhruv Parashar, Vinayak Raghavan, Soorya Sathish, Aryansh Sharma, Adithya
Shetty, Kai Smith
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
Third Test
Day 3, stumps
India 443-7 (d) & 54-5 (27 ov)
Australia 151
India lead by 346 runs with 5 wickets remaining
