In the land of the tallest towers and palm-shaped islands, one local retailer has adopted simplicity as its hallmark to compete with international brands that crowd into the region's malls. Giordano, a high-end fashion outlet, is one of a handful of retailers to eschew overdone designer fripperies that denote modern high fashion, and instead base its products on muted colours that suit everyday wear.
"Our business model stems from simplicity because it's easier for you to carry forward, especially through emerging markets and markets where retail is evolving," said Ishwar Chugani, the executive director at Giordano. "Our products are everyday, timeless, classic products which are very easy for the customer to select, because it's something people need every day." Founded in Hong Kong in 1981, Giordano came to the Middle East in March 1993 as a joint venture between Emirates Trading Agency in Dubai and Giordano International. With its headquarters in Dubai, the joint venture oversees 160 stores, with another 41 to open by next year and associate offices in 25 countries employing more than 50,000 people.
With 2,000 stores worldwide, revenues last year for Giordano topped US$1 billion (Dh3.67bn), with the Middle East accounting for 10 per cent of the business. Officials say growth is strongest in the Middle East and China - the latter accounting for a massive 26 per cent of Giordano's total revenues. The company reported 30 per cent growth in the second quarter compared to the same period last year.
The difference between Giordano and the hundreds of other luxury brands that are packed into malls across the region is easy to see. Shirts and pants follow a basic colour and design scheme. Collections that appeal to everyone are one Giordano's major strengths, Mr Chugani said. "When you watch what people wear, 80 per cent wear black, white and grey," he explained. "You walk into our stores and you know what you are going to get, and chances for error are minimum, unlike going into some high-end fashion stores where sometimes you can come out looking like a clown."
Today, Giordano Middle East features brands that include Giordano, Giordano Junior and the recently launched BSX, or Blue Star Exchange. By 2010, the company aims to have more than 200 stores in the region. The flagship brand Giordano Concepts will debut in the new Dubai Mall, which is scheduled to open in October. Keeping up with the times, Mr Chugani said, was the biggest challenge for retailers today, particularly in the Gulf region, where stores that fail to distinguish themselves risk going unnoticed within the wave of new malls and outlets coming into the market.
"Depending on the mall, we try to carry different merchandise, mixed merchandise. There is a lack of variety in this region, which is the reason why we are looking at different formats and concepts," Mr Chugani said. In the end, building a successful brand comes down to how well it is marketed, a concept Mr Chugani fully understands. Born in the Philippines to Indian parents, he is a marketing and management graduate who in 1979 spotted an advertisement for a manager to develop Sinbad, the amusement arcade at the Al Ghurair Centre in Dubai.
He applied and secured the job, and nearly 30 years later is still with the company, which now includes Giordano in its stable. In spite of his current role as executive director of Middle East stores and a member of the Giordano International management board, Mr Chugani appears more eager to boast of his title as UAE darts champion than his professional achievements. Yet when it comes down to business, he has no reservations tackling some of the key issues facing the retail industry today.
"Slowly the focus on really running the business is moving away to this mass market opening of stores," he said. "Personal involvement may be missing at the moment. But we are focusing on one brand, personal involvement has always been there." Giordano's staff retention rate is among the highest in the region, with about 20 per cent of the original staff hired in 1993 still at the company. Employees receive annual bonuses worth three to four times their salary.
"If we really go out of our way for our employees, we find that they will go out of their way for Giordano," Mr Chugani said. He said good employee relations and a congenial work environment were a vital component of developing loyal employees. "It is like when you have one child or 10 children - how much time is devoted to them? That's why Giordano has been able to succeed and remain consistent, because we narrow our brands, focusing on only a few," he said.
Despite soaring food and fuel prices and gloomy consumer confidence levels worldwide, many GCC residents have managed to maintain an optimistic financial outlook, according to the latest Nielsen Global Consumer Confidence Index. The buoyant Middle East and Asian economies have fostered confidence in retailers, but Mr Chugani urged caution. "I think everybody should be ready for a slowdown," he suggested. "If opportunity is there, I say continue your business expansion but be wary, watch your margins, watch your inventory, see whether expansion is sustainable. These days you definitely shouldn't expand just for the sake of expanding."
As for the industry, he said the best way to stay on top was to stay on your toes. "In this business, you do not strive for perfection because when you reach that point, things change - you strive for excellence." he said. "That is the key to success." vsalama@thenational.ae
