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Sharaf DG locks jaw on Bahrain retail sector

Consumer electronics and IT products retailers Sharaf DG has kicked off the first phase of an aggressive regional expansion plan with the launch of a ‘big box’ concept store in Bahrain.

Consumer electronics and IT products retailers Sharaf DG has kicked off the first phase of an aggressive regional expansion plan with the launch of a ‘big box’ concept store in Bahrain.

The 50,000 square foot outlet — similar in conception to Sharaf’s Dubai-based Times Square Centre goliath — is a first for the electronics retail sector in the Kingdom and also the firm’s maiden foray outside of the UAE.

According to Nilesh Khalko, CEO of Sharaf DG, location is the most important aspect as far as planning potential stores is concerned and he is convinced Al Futtaim’s mall in Bahrain is the ideal spot.

“For us to open stores of our size, whether it is standalone or in a mall, the first criteria is location and since the Mall of Al Futtaim (MAF) was opening there we evaluated that the shopping mall will be much bigger than any other,” said Khalko. “Bahrain is a small market that is growing, plus it sees a lot of visitors from Saudi Arabia coming across the causeway, so it is a window where our brand will see exposure from consumers, not just from Bahrain, but from the southern province of Saudi as well.”

As the first external country to the UAE to get the proverbial pin-prick on Sharaf’s expansion map, management in Bahrain will enjoy a certain level of autonomy. “Bahrain is operating as a separate country for us, there will be a country manager there and he has all of his support functions in terms of HR, marketing and finance,” explained Khalko.

Also not long have the doors opened on the first ‘big box’ store in Bahrain and the company is planning to open another one, meaning the in-country staff Khalko has appointed will have their work cut out for them.

“We have already signed up with MAF management for another store in the Issa Town area of Bahrain where there will be the Issa Town Mall in 2010,” said Khalko. “We have done our feasibility studies and based on the market and what we have seen of our competitors, we have decided that the market is big enough to take the ‘big box’ destination store.”

Khalko is so assured of the potential of the Bahraini market that he is predicting a footfall of roughly 4,000 people a day at the initial outlet, which equates to more than a million heads over the year. He says this is a reasonable target, citing Sharaf’s Dubai store footfall of around 500,000 people per month.

Despite this confidence he admits the Bahraini consumer electronics sector still has a great deal of maturity to go through until it reaches the level of Dubai and he draws a parallel between it and the emirates busiest city a decade ago.

“The Bahrain market, if you compare it to Dubai, it is still 10 years back, a lot of the stuff is sold on the high street and in souks. We are trying to talk to the distributors and principals to revive the market and make it more vibrant,” he asserted.

In terms of distribution Sharaf says that wherever possible it will be buying stocks locally in Bahrain, but when this is not a realistic possibility the default distribution hub will be Dubai’s Jebel Ali Freezone. Furthermore, although Khalko says the firm may be willing to invest in a Bahrain-based service centre sometime in the future, distributors will be responsible for carrying out of any services.

Sharaf DG’s unabated expansion plans do not stop at the opening of this new store and the announcement of a further Bahrain retail destination. It has also stated that it plans to roll up the shutters on around 25 stores in the GCC over the next few years.

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