Majid Al Futtaim, one of Dubai’s biggest private sector companies and top malls operator in the Middle East, is expanding its portfolio of luxury offerings through a partnership with Italian luxury furnishing and interiors brand Poltrona Frau.
Majid Al Futtaim Lifestyle has signed an agreement to acquire the rights to Poltrona Frau products in the UAE, marking its first foray into the luxury home furnishing category.
Dubai’s retailing giant, whose business interests also span property, lifestyle, leisure and entertainment sectors across the Middle East and North Africa and Asia, will help the century-old Italian legacy brand’s growth in the Arab world’s second-largest economy as well as the broader Middle East at a later stage, Fahed Ghanim, chief executive of Majid Al Futtaim Lifestyle, said on Wednesday.
The company will bring Poltrona Frau, to some of its best shopping destinations, including opening a flagship showroom in Mall of the Emirates later this year.
The brand’s existing Jumeirah store will also be expanded as part of the expansion, he said.
The partnership supports Majid Al Futtaim Lifestyle’s geographical and brand expansion strategy that focuses on acquiring and developing brands and assets in five core categories: fashion, home, multi-brand speciality, retail and beauty, he said.
“We are developing luxury communities and villages where we have real demand for this type of product, so it kind of lends itself automatically to our ecosystem,” he told The National.
Majid Al Futtaim Lifestyle will also build strategic inventory of Poltrona Frau, which served projects including Dubai Opera and Louvre Abu Dhabi, in the UAE to instantly fulfil orders. Customers previously had to wait for months to receive deliveries of luxury leather furnishing.
Founded in 1912 in Turin (Italy), Poltrona Frau has supplied its products to some of the world’s iconic museums, hotels, theatres, embassies and travel lounges. It also did airline interiors as well as the bespoke upholstery of automotive giants such as Ferrari, Maserati, Alfa Romeo and Land Rover.
“The partnership with Majid Al Futtaim is the first step of a journey that aims to cement Poltrona Frau as the ultimate luxury lifestyle brand in the UAE and the Middle East and provide the most elite customers with exclusive solutions for their homes, offices and public spaces,” said Nicola Coropulis, chief executive of Poltrona Frau.
“We believe Majid Al Futtaim LIfestyle’s vast ecosystem and its ability to interpret the true spirit of a brand … will help elevate Poltrona Frau to the next level and accelerate our growth strategy across the region.”
Demand for luxury goods across the six-member economic bloc of GCC outpaced the pre-pandemic levels in 2021 as sales grew 23 per cent from levels seen in 2019 according to a report by Dubai-based luxury retailer Chalhoub Group.
The market is projected to reach $11 billion in 2023 from $9.7 billion in 2021, growing at a compound annual rate of 7 per cent, according to the report, which was prepared in collaboration with the Fashion Commission of Saudi Arabia’s Ministry of Culture.
Market intelligence company Imarc Group, which estimates the GCC luxury market’s value at $12.5 billion at the end of 2021, expects it to almost double to $24 billion by 2027, growing at almost 12 per cent annually during the five-year period beginning 2022.
Mr Ghanim said demand for luxury goods remained resilient even during the pandemic and he expects it to remain robust despite a rise in inflation and fear of economic deceleration globally.
“We get our confidence from our consumers and the demand that we witness,” Mr Ghanim said. “We feel that the acquisition of the business will [add] so much potential [to Poltrona Frau] by the size of our ecosystem and our ability to extend the brand reach.”
The company, which has revamped its portfolio over the past five years, is set to announce another brand acquisition later this year.
The deal is almost done, he said, adding that the company is not keen to aggressively expand its brand portfolio.
It is focused on brands that can maintain consistent demand over the long term and can make a sizeable contribution to the Majid Al Futtaim Lifestyle's top line, he added.
Growth of its existing brands including Lululemon’s, CB2, Abercrombie & Fitch, LEGO, AllSaints, Crate & Barrel, drove double-digit annual sales growth to more than $217 million in 2022.
The new additions to the portfolio will help the company to further grow revenue, as it continues to expand both physical and digital stores for its brands across the GCC, he said.