George Davies, the man behind the major British-based retail brands Next and George at Asda, is set to make his regional debut with a new line of clothing tailored for the Middle East consumer. The first of an initial 60 children's clothing stores will begin to open in Saudi Arabia, Egypt and possibly Bahrain from October, in conjunction with the Saudi Arabian retail conglomerate Fawaz Alhokair, Mr Davies said. This marks his first partnership and the first chain he has launched entirely overseas.
The clothing will be geared towards the region's specific needs, such as climate. "What basically has happened in the past is franchisees, they produce the product in America or the UK ? I'm not doing that. I'm actually producing the product for the country," Mr Davies said. The new brand will be called FG4, which stands for Fawaz, George and "for" anyone, he said. It will start off with clothing for children, before adding womenswear and menswear to the line, he added.
The new venture comes during one of the toughest periods for the retail industry in the region. Sales, globally and in parts of the GCC such as the UAE, slowed after the onset of the economic downturn. But the slowdown has opened a window of opportunity for FG4, said Mr Davies. The Adams chain of children's clothing stores has gone into receivership and Fawaz Alhokair, the regional franchisee, had many vacant stores in the region, he said.
The business case is made stronger by Saudi Arabia's population of 29 million, meaning it is the largest market in the GCC. FG4 is also the first brand to be developed in house by Fawaz Alhokair, said Simon Marshall, the chief executive of Fawaz Abdulaziz Alhokair Fashion Retail. "We've always been in the franchise business where we manage franchises and we believe it's part of our evolution to do our own brand," he said.
FG4 will initially start out with 60 children's clothing stores, but in two years may reach 500 stores across the region, including the UAE. There has already been interest in the brand from Russia, South America and Europe, said Mr Marshall. Neither Mr Davies nor Mr Marshall would disclose the amount of investment involved in the FG4 launch. Since last December, Mr Davies has visited the region periodically to gain an understanding of the nuances of the Saudi Arabian and Egyptian markets. But there are some logistical problems unique to Saudi Arabia. Rules prohibiting men and women who are not related from meeting in public means Mr Davies cannot conduct focus groups with his potential female consumers, as he has done in the past. Observing what is in fashion among women in Saudi Arabia is difficult too, as the abaya is mandatory in public. But Mr Davies said he was confident that his female staff would be able to conduct these on his behalf.
"In the next few weeks I'm coming back over and I've got to get closer to the consumer but not just in Riyadh and Dammam and all those top cities," he said. "I've got to understand it in the smaller places." email@example.com