Listed Saudi retailer Fawaz Abdulaziz Alhokair Group has signed two separate franchise agreements with US and Danish companies to expand its retail portfolio.
The deals are with Danish retailer Flying Tiger Copenhagen and US-based yoga and athleisure brand Alo Yoga, the company said in a statement to the Tadawul stock exchange, where its shares are traded.
Flying Tiger Copenhagen sells a range of products such as toys, accessories, stationery and gadgets while Los Angeles-based Alo Yoga sells exercise and yoga-related clothes.
“As the largest retail market in the Middle East, Saudi Arabia is a gateway to the region and an enthusiastic adopter of innovative trends and products,” said Marwan Moukarzel, chief executive of Fawaz Abdulaziz Alhokair, on Monday.
“We are confident that Flying Tiger Copenhagen’s wide range of affordable products will witness great success, especially among young Saudi customers – offering more tools to inspire their creativity while meeting local and international sustainability standards.”
Alhokair and Flying Tiger Copenhagen plan to open 45 shops across the country over the next five years, with nine outlets and an online channel set to be operational this year, the company said.
The toys, hobbies and DIY crafts market in Saudi Arabia is expected to grow to $724 million this year as people spend more time at home due to the coronavirus pandemic, according to data portal Statista.
The first Alo Yoga store will be based at the Kingdom Centre in Riyadh. The company did not give a timetable for the opening.
“Triggered in part by the pandemic, Saudi customers have in the last year or so become increasingly health and fitness focused and have begun incorporating exercise routines into their daily life,” said Mr Moukarzel.
“In keeping with this trend, we have seen strong growth in customers choosing to [buy] exclusive sports and athleisure wear brands from around the world – in shops and online.”
MarcoDeGeorge, co-founder and co-chief executive of Alo Yoga, said the agreement is “a groundbreaking partnership for us, as we expand our global footprint starting with Saudi Arabia”.
Alhokair’s shares rose to 25.25 Saudi riyals in trading after the news, the highest level since March last year. They later fell to 23.94 riyals by 3.26pm UAE time, up 3.1 per cent on Sunday’s close.
The Saudi retailer operates more than 1,800 retail shops in 12 countries. Its portfolio comprises more than 90 international and local brands in the fashion, beauty, sports, multimedia and food and beverage sectors.
It signed a franchise agreement in April with French retailer Fnac Darty to set up consumer electronics shops in the kingdom. The first outlet will open next year.
In March, Alhokair and mall operator Arabian Centres Company announced plans to acquire a combined 51 per cent stake in Vogacloset, a UK-based e-commerce platform with 12 million users in the Middle East.
They acquired an initial 41.2 per cent based on a pre-money valuation of $60m, with the remaining valuation subject to an earn-out agreement based on certain growth thresholds.
