Dubai: In a mall environment skewed towards flagship mono-brand stores, multi-brand operators are getting that sneaking feeling of being left out.
Marianne Aljord, managing director and CEO at IBG Majestic and a retailer specialising in chic multi-brand fashion and high-end fashion, cannot quite figure out why.
"Customers like to be surprised and discover new brands or talents in multi-brand shops but now they are left with no more choices and variety, and that is sad and boring," she said. "In Europe and Asia, luxury brands are everywhere and multi-brand stores stand together with standalone boutiques.
"Top malls such as Marina Bay Sands in Singapore are totally open to multi-brands as long as the shop concept matches their standards and the brands are solid."
In the UAE and the GCC at large, the response on the part of mall managements couldn't be more different. "This strategy is destroying the potential of new talents which are unable to introduce their creations to the world because space is monopolised by big groups carrying standalone shops all over the place, which are similar in each and every mall of each and every city," Aljord added.
Majestic is marking 30 years of operations in the UAE this year.
Trendsetters
"Turnover-wise, multi-brand stores are financially more viable and have higher results than mono-brands, where if a designer failed a particular season, as the franchisee you are in a tough financial situation and it could affect the coming seasons.
"Beside the department stores, there are only a few multi-brand stores with high standards in the country and they are not given their chances in the strong malls.
"Multi-brand stores are trendsetters and will remain so — brands need them and the mall strategy will have to get that here."
Until such time, IBJ Majestic is re-jigging its local retail strategy by seeking out locations where the tourist traffic tends to congregate. This would take the form of "small and cozy locations directly accessible to the customers", Aljord added.
And for its overseas network, the near-term plans are much more ambitious in scope. "We will go through a heavy expansion in China and Russia as well as London and Amsterdam in the coming 18 months," Aljord said.
"For the coming three years, the focus is on Asia and Russia for our manufactured watch brand Hysek, and will be opening standalone stores in prime locations this year. We also have plans in Paris where we have been present since the early 1980s and now have 10 stores in the "golden triangle" of the city.
"We are of course keeping an eye on each and every new project in the UAE and considering Qatar in 2013."
All of this makes for a busy schedule in the near- to mid-term. But if a new brand comes calling for representation, Majestic will still weigh the possibilities. But with caveats attached.
Ownership context
"The different players are literally fighting and walking on each other to get brands, and the ownership context pushes brands to encourage distribution and franchising contracts under sometimes completely unrealistic conditions," she said.
"At the end of the day, the financial benefits of such a situation go mainly and sometimes only to the brands." At the same time, "Customers here are more receptive to newcomers on the market; that's why each season we introduce new brands which we find interesting and add something to the existing range in fashion," Aljord said.
"We have a solid partnership with some brands in which we believe and we will continue with them. Some designs are picked for one or two seasons as long as they correspond to the coming trends and are eye-catching.
However, fashion lifespans are short and brands or style could quickly lose their "thing". That is why we keep a very close eye on our stock and are very careful to replace some of them with a trendy newcomer full of promises at least for a season. "To be receptive and aware of what's happening and coming is the key to the success of multi-brands." And IBG Majestic will remain a multi-brand operator and steadfastly so.
Operation mantra: targeted investment
For 2012 and going forward, IBG Majestic's operational mantra is to invest in the right places, but scale down on all needless trimmings.
"Logically, financially and as per common sense in the profession, [one needs to] cut off the extras to optimise turnover and expansion in the next phase," said Marianne Aljord.
"Maintaining and narrowing our research for rising brands and designers is also our main concern."
