Gunning for gold

Tawhid Abdullah, managing director of UAE jewellery retailer Damas, has his sights set on moving his stores deeper into the GCC and India. He tells Alicia Buller about his plans to double the size of the company.

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By  Alicia Buller Published  May 7, 2006

|~|_NIK3555-200.jpg|~|Sparkling vision: Tawhid Abdullah plans to double the size of jewellery empire Damas within the next ten years, while retaining staff.|~|Tawhid Abdullah, managing director of UAE jewellery retailer Damas, has his sights set on moving his stores deeper into the GCC and India. He tells Alicia Buller about his plans to double the size of the company. Awards hang dutifully off the walls − some up to thirty years old. Well-worn brown leather sofas bustle for space amidst the clutter of the past − medals, photos and slides from business meetings. And unlike most Dubai head honcho quarters − more often than not located in glamourous penthouses on Sheikh Zayed Road − the Damas head office is situated in the heart of dusty Deira. In the gold souk. Where the story of the jewellery retailing giant first began many decades ago. Tawhid Abdullah is playing with his watch. “A man should only wear a watch. No jewellery,” he says with a look of disdain. Ironic really coming from a man that runs Damas − a multi-million dollar empire with over 300 jewellery outlets across the GCC and beyond. “It’s not the jewellery that gets me excited,” the managing director explains, “it’s the business, the action, the buying, the selling and the making money.” And make money, Damas does. Last year the UAE-based jewellery retailer raked in around US$816 million. And out of that handsome figure, US$40.3 million was profit. The sums are even more impressive considering that the price of gold is currently at a 25-year high − around US$50 an ounce. Abdullah shakes his head when asked about the effect that this has on his business. “Gold is now expensive for us to buy, which makes our life more difficult. But it is not our fault that the prices go up or down − if it came to us, we would fix the gold prices forever and that’s it. But we live in an economic world and we have to be exposed to external things sometimes, inflation and outside conditions, higher oil prices and the dirham-dollar peg.” He explains that this is one of the reasons that Damas has diversified its business into three sections: jewellery, of course, and two other sections that public know less about − property and investment. “Each of the business sections is about a third of the whole. The property and investment sections, they just make money easily. It is the jewellery section that holds the passion,” he says. Abdullah seems very relaxed for a man who must have a lot on his mind − and he makes running a multi million dollar business seem, well, rather easy. “Last year was a good year for Damas,” he says. “But then every year has been a good year for Damas. In the last fifty years, every year we have seen stable growth, apart from just three years.” Does Abdullah credit himself with this extraordinary achievement? “Well, it helps that we are in a nice environment. Dubai is a good place to be because three quarters of my job is done by the government. They help to protect us, they make the infrastructure, bring the people in to us, promote us and all we do is display our things,” he laughs. This is typical Abdullah. Self-deprecating. Modest. Resigned. He also seems remarkably modern for a man that heads up one of the UAE’s longest running family businesses. Damas was born in 1906 in Syria where it launched its first ‘retail’ outlet and by the late 1950s Mohammed Taher Abdullah, the managing director’s father and president of Damas, upped sticks and brought the business to Dubai. Today, his three sons continue to run his mini-empire: Tawfique is the chairman, Tawhid is the managing director and Tamjid is the deputy managing director. “We are all very close in age, this is why we chose to work together,” says the managing director. “I am 48 years old. My brothers they are 47 and 49, we are a very good team.” Abdullah explains that they all joined the company around 1980, but not without first clarifying each one’s job description. “The final decisions and statements for the company strategy come from my elder brother − he is the captain of the strategy. He is my boss. He says ‘this is the strategy, now push the button’. I am like the second driver. I then pass on executable actions to my younger brother, it’s like he’s the pilot.” When asked whether there have ever been any problems working within such a tight knit family business, Abdullah says no. “It’s not really a problem to work with my family because a lot of decisions are mediated by our outside investors. And we are very clear on our individual roles. So I say ‘I’m the managing director. You appointed me. Leave me to it and don’t interfere’ and then it’s fine. If you don’t go through these processes then there would be a lot of obstacles.” Together the team comes up with focuses for each year. The focus for 2006, says Abdullah, is ‘human resources’. “It is a very important year for us in terms of company strategy so there will be more focus on training procedures and incentives. Likewise, in 2005 our focus was marketing, and in 2003 it was finance. Next year we will focus on our international capabilities and in 2008 we will concentrate on our manufacturing capabilities.” But for this year, at least, Abdullah wants to focus on his 2500, mainly Asian, employees. “Over the next 10 years we want to have 50% of our workforce to have been with us for over 25 years. Currently over 35% of our employees have already worked with us for over 15 years,” he says, quite rightly with a flash of pride. “Managing 2500 employees across the GCC is a massive responsibility, so it helps that Damas has strong values that drive the business.” Abdullah goes on to list them: “Teamwork. Contribution to society. Commitment. Delivery. Branding,” he says. There is a slight pause and his voice grows perceptibly quieter. “Power is not what drives me. I think that power going to your head is a negative thing,” he sneers. “It’s not about power. Power is zero. Power is nothing. These are the core values that apply to all businesses, even a tiny supermarket. I learnt about business from all angles, you learn about business from all parts of your life.” Wherever he learned it from, he’s certainly doing something right. Last year Damas teamed up with the World Gold Council with the aim of pulling sales of gold out of the doldrums. The aim was to “make gold cool again” because research had shown that their younger customers were choosing to spend their disposable income on all manner of luxury items − iPods, jeans, holidays − but not jewellery. So along came a huge joint campaign to drum up interest in gold again, and the company recently even signed up Arab singing sensation Nancy Ajram as its youth ambassador for 2006 – 2007. “The results of the campaign were excellent, even though we were initially worried about the future of our gold segment. But once we set up the marketing initiative to ‘make gold cool again’ we realised that people didn’t want to go away from the product. They just wanted a product that suited them, you know. You have to give people what they want,” he says. “We took one of our products and then started to research to find out what the youth really wanted. We aimed to sell 3000 pieces in the GCC and we did 25,000 a week. That’s a big indication that there is a great demand for that segment, and what’s more it shows that there is hope for even more growth. We learnt that you can’t just say ‘they are not coming to my store’ and be resigned, you just have to give them what they want. It is much easier to give people what they want than to create new demand for things.” It seems like things are on the up, for gold and for Damas. And the next five years are going to be exciting ones, says Abdullah. More than anything, the firm plans to expand rapidly throughout the GCC, with particular emphasis on Saudi Arabia, followed by forays into India and Italy. “Saudi Arabia is the largest Middle East market and it is relatively untapped. I think that if we go in there using our big marketing clout then we have a very good chance. Even to start with, I think that we can become one of the top jewellery retailers in the country,” he claims. “And what will work in our favour is the fact that Damas believes in a lot of research and marketing. We know that you can’t tell people 'don’t buy that black jumper you want, just take the white!' You just give them the black jumper – because it’s what they want. Creating a desire is a difficult task. So we work out what their desires already are with extensive outsourced research teams.” It comes as no surprise to learn that within the next 10 years Abdullah has his heart set on doubling the size of the company, in terms of staff, revenue and outlets. Damas has never been one to have small dreams. Since its inception in 1906, the company has leapt from milestone to milestone. In the last 20 years alone, the firm has established its own diamond factories in Dubai, launched and developed hundreds of its own in-house brands, brought many exclusive first-time international brands into the market and opened up outlets in nearly every GCC country − as well as becoming the founding member of the Gold and Jewellery group in the GCC. “Within the next few years, we want to keep the foundation of loyalty we already have with our customers. Loyalty still comes first. That’s why sometimes we don’t go to expensive markets where the overheads are too high yet – we want to continue to give very good value for money to our customers,” explains Abdullah. “Currently 65% of our business is coming from inside the UAE, and 35% is coming from the outside. In five years time, I’d like 65% sales to come from outside the UAE and 35% from within the UAE.” And with a force like Abdullah behind it, there’s no reason why Damas should fail. It’s clear that the managing director loves his job. “It’s more than a job," he says. "In some jobs people don’t put all their passion in, but I put all of myself into it. I call it ‘work plus’,” he muses. “And if I didn’t feel passionate about my job then I could easily go to the Bahamas and run the company from my mobile phone from a boat, but I don’t.” And the Middle East jewellery market, for one, should be thankful that he doesn’t − it’s a far healthier place for it.||**||

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