Alshaya leads the way

The retailing giant is scaling new heights every week. But where next? I have been lucky enough over the years to meet some seriously rich and successful people, from George Soros to Richard Branson. As a rule though, most successful businessmen have very little to say for themselves. You tend to leave the meeting deflated, disappointed and dejected. (though I don’t mean either of the above two).

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By  Anil Bhoyrul Published  September 24, 2006

|~||~||~|The retailing giant is scaling new heights every week. But where next? I have been lucky enough over the years to meet some seriously rich and successful people, from George Soros to Richard Branson. As a rule though, most successful businessmen have very little to say for themselves. You tend to leave the meeting deflated, disappointed and dejected. (though I don’t mean either of the above two). Now and again however, that “special” one arrives. Someone with a mixture of charm, intelligence, wit, and most of all, sheer brilliance. At the risk of sounding over the top, all the above apply to Mohammed Alshaya, the Kuwaiti tycoon that we feature on the cover this week. Alshaya has an amazing knack of being able to do the right thing at the right time. In recent months, the media and financial world has been going crazy about the rise of luxury brands in the Gulf. But the really sensible analysis has been that, with the massive increase in the Gulf’s population, it is the cheap and cheerful retailers where real growth will be seen. Which is why Alshaya’s deal to bring H&M to the Gulf was a masterstroke. It isn’t the first time he has pulled off such a great deal. Several years ago – and against a storm of regional criticism – he brought the Starbucks brand the Middle East. It has been a massive money spinner, accounting for a decent chunk of the M.H Alshaya Group’s plus US$1 billion annual turnover. But Alshaya is not foolish enough to stick all his eggs in the clothing basket, and certainly not just in the Middle East. In total, he plans to open 400 new stores in the next year. The big question is, what next for the group? Is there any more left to achieve? Well, as he was quick to point out himself in the interview, he actually only employs 7,000 people. WalMart, the world’s biggest retailer, has 1.7 million staff on the books, more than the entire population of many countries. I predict within two years Alshaya will have opened 1,000 new stores, and taken his staffing level beyond the 20,000 level. He is well on the way to become the Gulf’s biggest entrepreneur and by far one of the most successful. He says he won't float his company, at least not now. I suspect the temptation of a billion dollar pay day may eventually be too much to resist.||**||Dog on the run|~||~||~|It just gets worse for Airbus. Last week the company was dealt another blow after Qatar Airways confirmed plans to take delivery of a further 20 Boeing 777s. It means that Qatar will run 40 Boeings in total, after the announcement last week of a firm order for 20 777s. In the past, Qatar had only dealt with Airbus. Same thing is happening at Emirates Airline, with more Boeing orders in place. Even Virgin Atlantic, unimpressed by Airbus is delays and excuses, is looking at Boeing options. Just a year ago, Boeing was in the dumps. Its chief executive was fired after a personal scandal, and corporate scandals in the US had left the company reeling. Airbus was king of the air. How the tables have turned. The A380 delays may cripple Airbus financially, while its chief executive was shown the door two months ago. Airbus insists the first commercial deliveries of the A380 will take place this year. Nobody believes it, not even its own customers. Right now, Airbus is a dog on the run. ||**||And the loser is....|~||~||~|To the Shangri-La Hotel last weekend, and lunch with the very impressive Steve Ridgway, CEO of Virgin Atlantic. Like Alshaya, the question for Virgin in this region is where next? Ridgway is a somewhat underrated marketing genius. His boss Richard Branson gets all the headlines and all the credit, but it is actually Ridgway who works out all the detail. It was Ridgway who came up with the plan to conquer Dubai, and conquer he did. The battle so far has been in prices, and Virgin deserves credit for starting a price war. But with economy return tickets between Dubai and London now at US$800, they won’t fall much further. The big battle will be in products – better chauffeurs, better food, better seats, better planes. Right now Virgin Atlantic has the edge with its Upper Class service certainly more impressive that Emirates Business Class, even though both have similar prices. I am not sure who will win but I know who has already lost: British Airways. ||**||

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