Real estate boom hurts PC retailers

Dubai’s real estate boom is driving local computer shops to the wall, according to one PC retailer exhibiting at this week’s show.

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By  Nicholas Wilson Published  September 27, 2005

Dubai’s real estate boom is driving local computer shops to the wall, according to one PC retailer exhibiting at this week’s show. He says companies buy computers on credit and pump their cash into Gulf stock markets and real estate to make a quick buck instead of repaying debts. “They leave us to sink or swim,” says Houssam Al Nobani, product manager at Gulf Shadows Computer Systems. “Real estate offers unbelieveable income. It’s hurting the PC business, which has no liquidity.” In Dubai, overheads are soaring as the economy heats up and many firms will not survive, Al Nobani says. “Go to Khalid Bin Al Walid Street [Dubai’s main computer retail street] and write down all the names of companies. And then go back there in two months and see how many are still there,” he adds. According to Al Nobani, Gulf Shadows will survive because it is supported by banks and has good finances, but others are not so lucky. “The market will only improve when the liquidity problem is solved, and companies stop thinking about the stock market,” he says. As if the real estate boom were not enough, Al Nobani says the local PC market is also under threat from China, which is swamping Dubai with cheap imports retailers say. “They are selling at cost plus — the cost of the factory, shipping, and a very small margin,” Al Nobani says. His fight-back strategy is simple: beat the Chinese at their own game by buying products from China too, and then using linguistic skills to offer better customer service.

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