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Also aims to foray in to Indian retail sector
Thomas Dotzek, Senior General Manager of Al-Futtaim Watches & Jewellery (Supplied) Dubai-based Al-Futtaim Watches and Jewellery plans to set up a watch assembling facility in India and also plans foray into country’s retail sector in order to capitalise on its strong growth prospects, said a senior company official.
“We have opened our 100 per cent subsidiary in Chennai, India. Starting with Westar distribution in India is the first step. In the second step, since the Indian economy is improving, I want to go into assembling, starting local production in India. And the third step would be starting our own retail network for our in-house brands Westar and Kolber. Because I believe India is one of the most promising markets in this part of the world. The GCC and Subcontinent offer huge potential which is untapped if you look at the watch market,” said Thomas Dotzek, Senior General Manager of Al-Futtaim Watches & Jewellery.
Al Futtaim Watches and Jewellery is a subsidiary of Al-Futtaim Group and one of the leading retailer, wholesaler and brand principals of the world renowned watches and jewellery brands including Seiko, Raymond Weil, Espirit, Fossil, Kolber, Westar etc. in UAE, GCC, Europe, Singapore, Malaysia and Africa. The group aims to assemble its two in-house brands Westar and Kolber in the India.
“We have positioned ourselves in Chennai, Tamil Nadu. This is for a strategic reason because Westar is mainly known in South India as most of expats working here are from that region. From Chennai, we will expand the distribution business to other parts of the country. For retail, we have already started discussions with retailers in Bangalore, Mumbai and Delhi. We definitely need to open branch offices. Based on the excellent free zone facilities in India, we can shift our logistics hub to India from Hong Kong. We can also serve India for exports to our distributors around the world. This will all be part of natural business growth. This will be a major project for me in the next two to three years. Since our business is showing profits otherwise we would not have this kind of investment plans,” Dotzek said.
Since Al-Futtaim, he said, is financially a strong group, it’ll go alone with full control of the business.
The group will buy straps and other basic components locally in India but movements for the watches will come from Switzerland or Asia, Dotzek said, adding that it’s a matter of quality. “Once government goes ahead in terms of opening up of foreign direct investment, then retail scene will change drastically in India.”
Focusing on kiosks
Al-Futtaim Watches and Jewellery currently operates 40 outlets across the UAE and aims to add another two dozens in the next three years.
“We have 40 outlets in the UAE with three different retail formats – it’s watch house, watches and jewellery and kiosk kind of concept where we offer the start price points of a couple of brands. In the UAE, we’re looking to expand our retail network in a more quality way because, according to my perception of the market, malls are already starting to cannibalise each other, so the number of malls as of today are sufficient enough in Dubai and Abu Dhabi; so only strong malls will survive. We will concentrate on key areas and not open shops just to create visibility and making loss. This is not our way. We have quite covered Dubai, Abu Dhabi, Al Ain, Fujairah and Ras Al Khaimah. But there is still scope for us to expand but not in a very aggressive way.”
In terms of number of outlets, he said, Al-Futtaim will open 25 outlets in the next three years and big part of this will be kiosks because costs of stores are going up, so Al-Futtaim Watches will focus on strategic places within malls like main corridors or in front of hypermarkets where there’s good foot flow.
25% spike in rents in mall shops
He warned operators and owners of the shopping centres to rein in spike in rents which have gone up between 10 and 25 per cent.
“Rents are going up steadily so shopping centres’ operators have to think about it in order to remain competitive. But it’s a free market and as long as you have companies agreed to buying into these rates, it’s fine. Dubai is still an important market for international retailers. The market is not negative but challenging for the retailers. Depending on the location, the rents have gone up between 10 and 25 per cent.”
Smaller players going out
He said a number of smaller companies established in good times in 2007-08 have been closing down since the credit crunch hit the local market because they couldn’t compete with the established players. So it’s natural cleansing of the market which is good; but the professional companies have to fight for the market share. These companies closed down were basically distributors – mainly run by one-man show or 4-5 partners, Dotzek said.
Published in joint cooperation with Emirates 24/7 -By :Waheed Abbas