Retail revolutionary

Sir Richard Branson’s decision to go ahead with the opening of Virgin Megastore was an endorsement of the Dubai government’s ‘business as usual’ approach; and should the airline industry make it, the next step is to begin virgin flights to Dubai

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By  Massoud Derhally Published  November 8, 2001

Introduction|~||~||~|Amidst all the general doom and gloom, October has been a busy month for Dubai. In addition to the Big 5, Index, and Gitex exhibitions, the arrival of Virgin Megastores, along with Richard Branson, and Lebanese singers Ragheb Alame and Yuri Mrakadi, was good publicity for the Emirate. Although not as big as the 30,000 square foot, $10 million store in Beirut, Lebanon, last month’s opening of the Dubai store was a major landmark for the UAE’s retail industry.

After a much belated opening, and the recent attacks on the United States, Richard Branson is still confident about the Middle East market, even though he almost postponed the opening at the last minute. “I think it is very important for everyone in the world to carry on with what they are doing. The world came to a full stop in the last month. If everyone just spent his or her time watching television then in the end business and society will suffer. So it is important for people to get out and keep moving forward,” Branson told Arabian Business.

“I think that although everyone is a bit shell-shocked and slightly depressed about the events last month and is worried about the events next month, given time we’ll get through this. People in the Middle East, in Beirut and Dubai, have been quite appreciative that we have been opening Megastores. They needed a good music store which did not exist before,” added Branson.

The store has already received praise for its friendly and helpful sales assistants, although the selection of products on offer has been criticised. That aside, how does Branson see Dubai fitting into Virgin’s plan for global domination? “We have to make sure that anything we do is in keeping with the brand, is delivering good value, quality, innovation, surprising people, and shaking up industries; and as long as we keep doing that the Virgin brand will be enhanced.”
||**||Dubai and Virgin|~||~||~|
In Lebanon, Branson teamed up with Jihad Murr, a media tycoon who started two of the most successful radio stations in Lebanon, a television station (Murr TV or MTV), and is also the first cousin of the powerful interior minister. In Dubai, Branson, joined forces with the Daher Group, who are the partners of Spanish retail chains Massimo Dutti and Zara, in the UAE.

Branson says that the Daher Group brought fresh ideas to the Virgin megastore in Dubai in terms of design and ambiance. “The store in Dubai is not only a music store but also a place for young people to go. I think in the past you have had small shops, which people popped into. With the new store, people will be able to go into one place and get almost any record that has been released around the world under one roof. At the same time, it should be quite a social place to go,” says Branson

To some extent a lot of the singers and artists from this part of the world have been ignored, neglected or not given the attention they deserve by record companies, with the exception of EMI. So does Branson foresee any contracts coming up with regional artists? “I think at some stage we should set up a record company in this region and develop regional artists. We have done so in France, Germany and Italy but have not done so in this region yet,” says Branson. “But, as you said, EMI is one of the few international companies that have set up here. EMI happens to be run by Ken Berry who I started off business together with and he has done very well. But obviously EMI is a much bigger company than V2, which is our company.”

On the day of the opening, Branson did not know that Tower Records, which competes with Virgin in most cities around the world, particularly in America and Japan, was setting up shop in Dubai. “Competition is a good reason to hurry up. They are a very good company and now people are going to have a lot of choice, whereas they had little choice before,” says Branson.
||**||The Future|~||~||~|
In the longer term, Branson hopes to broaden regional business to include Virgin Atlantic flights into Dubai, a plan unaffected by September 11’s events. However, Branson says that all airlines are in danger unless governments help the industry obtain the financial support required from banks and lending institutions. Virgin Atlantic, like many of its peers and rivals in the European and US aviation industry, has had to trim down in order to remain operational since the September 11 attacks.

The airline has layed off 1,200 staff and is bitter with the British government’s reluctance to support its airlines. Branson believes that such reluctance hurts the competitiveness of his airline and other British companies, especially when the US government has extended financial support to subsidise its companies, as have other European governments. With declining levels of air travel, and an ongoing war in Afghanistan, many industry analysts predict that consolidation is key to survival and unless there is a bailout, many airlines will file for bankruptcy. But Branson does not fear that Virgin Atlantic’s survival is threatened by the crisis the aviation industry is facing. At a time like this he was thinking of buying Belgian air carrier Sabena and was in talks with the Belgian government about trying to turn Virgin Express’s shuttle service between Brussels and London, into a principal Belgian airline.

Still, in the short term the challenges are huge “When the incident happened in New York, British Airways and ourselves met our government and our government assured us that if American airlines were given a lot of support, that they would give the equivalent support to the British airlines because we did not want the level playing field to be tipped in the American airlines’ favour,” explains Branson. “Since then, the American airlines have been given $18 billion and the UK airlines have not been given any money yet. Maybe the British government will balance the books, and maybe they won’t but Virgin Atlantic is strong. We just don’t want to be weakened as a result of state intervention by the American government and now you have got state intervention by the Belgian government and the Swiss government, so we feel that most likely there should be a balancing of the books,” he added.

Today, as opposed to when he first started as a businessman, Branson still sees himself as an entrepreneur, “but just doing things perhaps slightly on a larger scale than when I first started out and challenging slightly bigger companies than when I first started out. I still love a challenge, I still like to see what I am capable of, I still try to challenge people around me and see what they are capable of and I still try to create things that we are proud of, and have a lot of fun whilst we are doing it.” Positive words, and the type that will be music to the ears of the UAE’s leadership.—By Massoud A. Derhally
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