King of Middle East retail brings UK giant to the Gulf

The Kuwait-based M.H. Alshaya Group has struck a deal with Boots The Chemist, which could see the UK’s leading health and beauty retailer opening 200 stores across the Middle East, Arabian Business can reveal.

  • E-Mail
By  Massoud A. Derhally Published  January 22, 2006

The Kuwait-based M.H. Alshaya Group has struck a deal with Boots The Chemist, which could see the UK’s leading health and beauty retailer opening 200 stores across the Middle East, Arabian Business can reveal. According to a company source who spoke on condition of anonymity, the group is also close to wrapping up a similar deal with Gap Inc., the largest clothing chain in the US, to open Gap and Banana Republic stores in the region. This would be Gap's first deal to franchise its stores outside the US, as the company owns all of its stores in Canada, Germany, Spain and the UK. “This year, we are looking at [opening] 10 [branches of Boots], but over the next five years we’re looking at [opening] around 200,” Mohammed Alshaya, CEO of the Alshaya Group told Arabian Business. Hennes and Mauritz (H&M), the fashion and cosmetics retailer that sells original designs in outlets across Europe and the US, is another brand with which Alshaya is close to finalising an agreement and is likely to open its first regional store in Dubai's Mall of the Emirates or Festival City. Wasim Arabi, a confidant of Alshaya, travelled to Europe to sign the deal, according to company sources. Alshaya declined to comment on whether there were ongoing negotiations with companies other than Boots. However, Arabian Business has corroborated that the talks are taking place. When asked whether he would introduce Boots stores in the same format as they exist in the UK, Alshaya said: “Boots, as a drug store and chemist — the exact formula that has been developed in the UK — we will bring it here, with the products.” The company is planning to develop the brand in the region over several stages. In the initial phase, Boots stores will be opened in Dubai and Kuwait. “Boots is the first chain of drugstores that will be professionally run in the Middle East," Alshaya said. “The products will not necessarily be imported, but also bought from local manufacturers. What we are going to offer are careers, training, job creation for young pharmaceutical [graduates]. It will be good news for these people… creating up to 4000 jobs, a good offering for the consumer and also a good value for money." Alshaya said the Kuwaiti company's decision to go with Boots, as opposed to an American drug chain like CVS, was because “there is no drug store in America that [has gone] international”. Alshaya, who was appointed chief executive of the conglomerate's retail division in 1990, has been successful in expanding the business to over 600 franchise stores across seven Middle Eastern countries, Turkey and Russia. After earning his MBA from Wharton (University of Pennsylvania), Alshaya headed to Wall Street and decided he wanted to get involved in the family business. In 1985, the group was involved in car dealerships, real estate and various other investments. It only ran four stores on the retail side. Wanting to make his mark, Alshaya went into the consumer segment and started a three-month training stint at Mothercare in Manchester, England. Now, 20 years down the road, the 44 year old sits at the top of a retail empire. His Kuwait-based group taps multiple sectors across the region and its portfolio comprises over 100 Starbucks stores; The Body Shop; TopShop; TopMan; River Island; Claire’s; Mothercare; Debenhams; Liz Claiborne and Next. In recent years, Alshaya has also added new brands to the food segment of the business, bringing in Le Pain Quotidian, a quality bakery from Belgium and Asha’s, a contemporary Indian restaurant, named after the singer Asha. The only brand that has escaped Alshaya’s golden touch is Laura Ashley, the clothing and furnishings retailer, which has closed down all of its stores in the region. But the parent company, known for its floral fabrics and home furnishings, has struggled financially in the past. “He is one of the smartest people in the Gulf. He is definitely the King of retailers,” Ibrahim Dabdoub, the chief executive of National Bank of Kuwait and a friend of Alshaya told Arabian Business. The prominent banker attributes Alshaya success to “a combination of heritage. Mohammed Hamood Alshaya established the company 150 years ago in India and Mohammed is the third generation of this family." “He trained at Morgan Stanley and received his MBA from Wharton. He is a rare breed. Al Shaya is an old merchant family,” Dabdoub added.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code