Marka to open second Harper's Bazaar Cafe in Dubai

Marka, the Dubai-listed retailing group, plans to add another Harper’s Bazaar Cafe in Dubai’s City Walk. In May, the company opened the world’s first Harper’s Bazaar Cafe in Dubai Design District, which adds to a hospitality stable that includes a vast Uefa Champions League-themed cafe in Yas Mall and the restaurant chain Reem Al Baw­adi. The second Harper’s Bazaar Cafe will have 46 interior seats with 52 more on the outdoor terrace.

“Dubai’s second location for Harper’s Bazaar Cafe follows a successful opening earlier this year in D3,” said Hesham Almekkawi, Marka Hospitality’s managing director. “We are proud to open this new cafe at City Walk, which forms a key part of our UAE expansion plans.”

In the second quarter, Marka posted its seventh quarterly loss in a row amid a challenging retail economy and a slow month during Ramadan.

Despite assurances to investors that the company expects to become profitable this year, Marka has not yet registered a quarterly profit since it was floated about two years ago.

Many of the UAE’s food and beverage retailers are facing increasing pressure as the softening economic climate from plunging oil prices hits their bottom line. A strong dollar, to which the dirham is pegged, is making the UAE a more expensive destination for tourists and the exponential growth in food and beverage outlets has created a perfect storm for the sector.

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Marka to open second Harper's Bazaar Cafe in Dubai

Marka, the Dubai-listed retailing group, plans to add another Harper’s Bazaar Cafe in Dubai’s City Walk. In May, the company opened the world’s first Harper’s Bazaar Cafe in Dubai Design District, which adds to a hospitality stable that includes a vast Uefa Champions League-themed cafe in Yas Mall and the restaurant chain Reem Al Baw­adi. The second Harper’s Bazaar Cafe will have 46 interior seats with 52 more on the outdoor terrace.

“Dubai’s second location for Harper’s Bazaar Cafe follows a successful opening earlier this year in D3,” said Hesham Almekkawi, Marka Hospitality’s managing director. “We are proud to open this new cafe at City Walk, which forms a key part of our UAE expansion plans.”

In the second quarter, Marka posted its seventh quarterly loss in a row amid a challenging retail economy and a slow month during Ramadan.

Despite assurances to investors that the company expects to become profitable this year, Marka has not yet registered a quarterly profit since it was floated about two years ago.

Many of the UAE’s food and beverage retailers are facing increasing pressure as the softening economic climate from plunging oil prices hits their bottom line. A strong dollar, to which the dirham is pegged, is making the UAE a more expensive destination for tourists and the exponential growth in food and beverage outlets has created a perfect storm for the sector.

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F&B operators can beat slow demand by filling market gaps

A focus on value for money will help food and beverage (F&B) operators stoke consumer demand amid the sector’s most challenging period since the financial crisis.

According to the Dubai F&B consultancy Glee Hospitality Solutions (GHS), this year is forecast to be the first since 2009 in which the sector reports flat growth or up to a 5 per cent fall.

A combination of softer economic conditions affecting demand and an overcapacity of food outlets has placed a further burden on concepts.

“We have seen many high-end concepts close across Dubai as it is hard to be aspirational when money is tight,” said Aboudi Saadi, the chief executive of GHS. “A soft economy coupled with the exponential growth of F&B options means outlets will close. Even in our Gramercy gastro pub in DIFC, the financial heart of the UAE, people will come in for the lunch special at Dh70, and not even buy a drink.”

GHS has been involved in the launch of about 40 F&B concepts in Abu Dhabi, Al Ain and Dubai since 2009, ranging from high end to fast food.

Mr Saadi said GHS will close two of the 10 concepts it owns this year because of falling revenue and stubbornly high rents.

Across GHS’s portfolio, there has been an average of a 20 to 30 per cent fall in revenue this year.

“We still have people knocking on our door wanting to open new F&B concepts,” Mr Saadi said. “We have to explain to them that the economy has changed and it’s a new ball game as the bubble has burst.”

According to Rabia Yasmeen, a research analyst with Euromonitor International, the number of F&B outlets is expected to reach 16,720 this year, rising to 19,000 by 2020.

“The growth in the [number of] outlets follows the residential expansion in the country, as new residential spaces and community centres are being developed, existing food and beverage outlets see the need to expand into new areas, which is also driving the growth of the sector,” he said

While many operators are struggling, however, Mr Saadi believes there are still gaps in the market for value-for-money quality food. New malls and locations also means that there are more affordable rents on offer. He said there are exceptions to the sector’s downward trend, especially outlets favoured by Emirati customers.

“The slowdown is very apparent,” said Trevor MacKenzie, the managing director of the restaurant operator Mango Tree Worldwide. “When things are down I see opportunity because people still need to eat.”

Its Mango Tree outlet in Souq Al Bahar closed this year and will reopen in the first quarter of next in another location, to target a more value-focused customer.

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Amazon reported to be eyeing stake in Souq.com

Amazon, the world’s biggest e-commerce retailer, is looking to buy a stake in Souq.com, the Mena region’s biggest e-commerce site, according to media reports.

Reports and rumours over the past few weeks have suggested a variety of buyers vying for a slice of Souq.com, ranging from retail groups based in the UAE to international players looking to gain a foothold in the region.

Ronaldo Mouchawar, chief executive and founder of Souq.com, told The National that he could give no comment on what Amazon was looking to do “but there is always talk about Souq.com”.

Amazon was unavailable for comment on the possibility of buying a stake in Souq.com.

“There are Amazon executives in town,” said Omar Kassim, chief executive and founder of e-commerce site Jadopado.com. “The positive side for the sector is the region attracting international interest, which is always good.”

Two early investors in Souq, Tiger Global Management and Napsters, joined a further funding round of US$275 million this February. Mr Mouchawar suggested in June that Souq.com would be ready for a stock market flotation within two years as the company was growing at between 60 and 90 per cent every year, depending on the country focused on.

When Souq.com started in 2005 it was an internet auction site linked to the Arabic portal Maktoob. In 2011 it changed tack to become a retailer and marketplace for third-party vendors and, from that second start, it has become a leader for e-commerce in the region.

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Lulu Group to build malls in Dubai, Sharjah and Umm Al Quwain

Lulu Group International will make its biggest ever one-off investment in the UAE with a Dh2 billion plan to develop three malls in Umm Al Quwain, Sharjah and Dubai over the next two years.

Line Investments & Property, Lulu’s mall development and management division, aims to build and operate the three malls scheduled for delivery next year, 2018 and 2019, respectively.

It currently operates six malls in Abu Dhabi, including Al Wahda Mall, Mushrif Mall and Khalidiyah Mall.

Mall of Umm Al Quwain will be a single-level strip mall of 20,000 square metres, with a seven-screen cinema due at the end of next year.

Avenues Mall Sharjah will cover 43,000 sq metres with premium restaurant and entertainment venues, and is due to open by the end of 2018.

Avenues Mall in Dubai’s Silicon Oasis is planned to extend over 82,500 sq metres and has been designed as a premium retail and leisure destination. It is expected to open by the first quarter of 2019.

The Avenues Mall in Silicon Oasis will compete with the new Cityland Mall, which was announced last week. It is located about five kilometres away and is due in 2018.

“We have done our due diligence and all our malls will be servicing the local community,” said Marcello Larizza, the general manager at Line Investments & Property – Dubai, Al Ain and Northern Emirates. He said this was Lulu’s biggest investment in the UAE, but the group was also building three malls in India and another three in Saudi Arabia.

“While there has been a softening in the global economy, we are being aggressive and bullish about the outlook because we have to look to tomorrow. If you look at Dubai’s plans for its theme parks and the Expo, this will take thousands of workers and employees that all need to live and eat. We will anchor all the malls with Lulu hypermarkets and supply many of the food and beverage outlets from our own Tablez [Lulu’s F&B arm] concepts.”

While the UAE’s retail sector has been buffeted by the strong US dollar, many community and neighbourhood malls have opened to satisfy local retailing needs. Majid Al Futtaim Group, the UAE’s leading mall operator, recently said it was turning its attention to the domestic market and neighbourhood malls.

Nakheel’s retail development pipeline features a mix of community, regional and super regional malls, with the delivery of 13 million sq feet in the next three to five years, adding to the 4 million sq ft already in operation.

“There are still a lot of gaps in Dubai and the UAE for neighbourhood malls,” said Matthew Green, the head of research for property consultants CBRE.

“I’m surprised at the size of the plans for Lulu’s Silicon Oasis mall, but it is an underserved community with regards to retail. It does mean other neighbourhood malls will come under pressure. Lulu works well as a brand with mid to low-income communities and Lulu tends to open large hypermarkets, so much of the space may well be taken by its own anchor. The road [Sheikh Mohammed bin Zayed Road] it is on is still well below capacity, so it can take more development.”

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Department store Tryano on growth trend with millennials

Amid a softening in consumer spending, millennials interested in fresher fashion options will bolster demand for the Chalhoub Group’s Tryano department store in Abu Dhabi, according to its general manager.

Tryano is gaining traction after completing its first year of trading in Yas Mall this month, said Hamdi Kulahcioglu.

“The market is soft at the mom­ent. The only way to win in a challenging environment is to offer something fresh and vibrant,” he said. “We have now found brands are asking us for space. It’s a complex business with multiple categories, hundreds of brands and thousands of customers, but we have created something that has gained traction. Tryano will be rolled out to other geographies once we are certain of every step and harmony is assured.”

The retail climate has been challenging for the past 18 months, with many operators hampered by an economy hit by a stubbornly low oil price, the strength of the US dollar, lower spending visitors from countries with their own domestic problems such as Russia and China, and the recent fall in the value of sterling after the Brexit vote.

A focus on the Abu Dhabi market is part of Tryano’s long-term strategy to build a strong relationship with its customers, by offering an “experiential rather than transactional environment” that includes the kind of personalised service that is synonymous with some of the world’s most famous department stores, such as Harrods.

“We have over two-thirds of our customers as locals from Abu Dhabi,” Mr Kulahcioglu said. “We have tailored our store experience offering a four-person concierge service, childcare from trained assistants while you are shopping, free make-up sessions and we are opening a beauty room early next year that will allow local ladies an option of private beauty sessions.”

While the store is primarily aimed at women and children’s fashion, it also provides space for local and regional designers to promote industry and creativity across the region.

“The typical Tryano customer is young, well travelled and knowledgeable about popular culture,” Mr Kulahcioglu said.

The store itself straddles 200,000 square feet over three floors and looks more like a hip hangout in Barcelona or Ibiza, with the four seasons represented throughout its different sectors.

“If you look at the demography of Abu Dhabi, it is young families in their late twenties or early thirties that want sophistication. Millennials today will shop at Fendi and H&M [and] they want high-end and high street, and that is what we offer. Our beauty range starts with Mac products, which have a very achievable price point and then move up to higher price points. Abu Dhabi locals are remark­ably loyal to a brand and an experience, and we believe we have created an arena where they are well catered to.”

A number of high-end department stores are planned for the capital, with Gulf Related’s Al Maryah Central development to include a 205,000 sq ft Macy’s and a 230,000 sq ft Blooming­dale’s. The opening scheduled is for 2018.

Broker JLL says there is currently 2.6 million sq metres of gross leasable retail space in Abu Dhabi, and this is forecast to rise to more than 3 million sq metres in 2018. Retail rents held steady in the third quarter, JLL said.

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BHS plans expansion under new ownership

British Home Stores (BHS) under its new Qatari ownership has revealed a three-year plan to grow the brand, opening up new stores across the region and in Russia and Africa.

Qatar’s Al Mana Group is in final discussions with three new franchise partners to open stores in 10 countries.

The group is also optimistic about finding a new franchise partner for Dubai and the Northern Emirates after the Al Maya Group terminated its operations closing all five of its BHS stores, including in Mall of Emirates, by the end of the year.

The closure of the Al Maya stores was decided before the collapse of BHS in the UK.

BHS went into administration in the UK in April of this year, with the loss of 11,000 jobs.

Still, the new management has not ruled out a return to the British high street.

“BHS is a very British aspirational brand that is loved in many parts of the world,” said David Anderson, chief executive of BHS. “When the chain went into administration the 61 outlets in 14 different countries were profitable and the Al Mana Group, along with our franchise partners, are willing to invest in the brand. The Al Mana Group have a global reach, so we are able to take the brand where we see opportunity, we may well return to the UK. Our stores in Abu Dhabi and Qatar are very popular, so we are likely to see more Middle Eastern expansion.”

The retail sector has faced challenging conditions across the globe and throughout the region, where a low oil price and currency fluctuations have hit consumer spending.

“Retail is challenging, which is why you need a strong brand,” said Mr Anderson. “Nearly all our suppliers, over 100, have signed back up with us and they have been signed specifically for the international markets. Bricks and mortar isn’t performing well in the UK, but there are economies across the world that are stronger than others. We have just opened a logistics hub in Dubai to facilitate supplying our international stores which shortens our supply line by four to six weeks. I’m expecting strong growth.”

Because BHS is not bound to brands and other suppliers, selling its own branded goods places it in a stronger position than stores that cannot control, inventory, price and logistics.

“The most profitable stores are those that carry their own brands,” said David Macadam chief executive of the Middle East Council of Shopping Centres. “While no one is insulated from the retail climate presently, BHS is a value chain and in a challenging environment it has an opportunity to prosper. Its biggest challenge will be sec­uring good real estate at good rental rates. There is definitely room for another department store to anchor malls.”

Last week British lawmakers backed plans to strip the billionaire Philip Green, a former owner of BHS, of his knighthood over the collapse of the department store chain.

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Etihad Airways has announced a new partnership with Visa to extend its financial services offering internationally. The tie-up with Visa allows the airline to use its data to target the best international banks that suit its customers and its brand.

It will target Serbia and Saudi Arabia next year, driving its financial services offerings to international customers that are within easy reach of Etihad and its codeshare partners. The Abu Dhabi carrier took a 49 per cent stake in Air Serbia in August 2013.

The airline has offered a credit card, Etihad Guest, through Abu Dhabi Islamic Bank and Abu Dhabi Commercial Bank for the past eight years, and the offers and incentives have increased loyalty and driven passenger footfall.

Serbia has no loyalty cards in the market and is, therefore, a prime candidate for rewards and offers, said Darren Peisley, the chief executive of Hala Group, which manages Etihad Group’s loyalty programmes.

“We expect a 20 per cent jump in the amount spent on Etihad Guest over the next 12 months,” Mr Peisley said. “We are currently in discussions for a third issuer in the UAE, which we expect to announce soon. While the rewards are substantive it’s a marketing exercise that will eventually lead to credit card customers buying more Etihad air tickets.”

Etihad Guest is offered across four levels with an annual subscription of between Dh1,000 and Dh2,000, depending on the card chosen, and offers between 150,000 and 200,000 air miles, the equivalent of a business class return flight to Eur­ope, on sign-up.

The airline sector is coming under increasing pressure as low oil prices, global terrorism and a strong dollar hit the demand and desire to travel.

The International Air Transport Association explained the number crunch Gulf airlines face. It said Middle Eastern carriers posted a 10.3 per cent traffic increase in August, while capacity climbed by 13.7 per cent, resulting in a 2.5 percentage point fall in load factor to 81.2 per cent. However, Etihad’s new marketing push into Saudi Arabia could reap dividends.

“Targeting the Saudi market first is a deft move,” said Saj Ahmad, the chief analyst for StrategicAero Research. “Customers in the kingdom vie for high-class standards and service and coupled with Etihad’s brand and quality, many Saudis will certainly enrol in this programme going forward. That said, there will always be an element of price-sensitive customers, who have loyalty only to cheap flights and not much else.”

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Dh16.4 million Polo Home villa is out-of-the-way luxury

The address of this property claims it is located in Arabian Ranches, but it is technically down the road a little bit.

However, it has an exclusivity all of its own.

While the Ranches has carved out a niche for itself as Emaar’s suburban development inhabited by firmly middle-class types, Emaar’s Polo Homes development is located behind the Dubai Polo Equestrian Club on Al Qudra Road.

This K-Type villa has an asking price of Dh16.4 million, a figure justified by it’s 18,000 square foot plot and views over the vast green fields of the polo club – a view often accompanied by the muffled gallop of horses.

Officially opened in April 2006, the club now offers a gym, pool, restaurants, bars, spa, stables and vets. Situated next to Studio City, it sits opposite Arabian Ranches 1 and 2, which has a golf course and new communities springing up – almost daily – around it.

Polo Homes is made up of 71 villas surrounding the two polo fields.

The villa, which has been extended to more than 8,000 sq ft of modified built-up area, sits in a quiet cul de sac. It has six bedrooms, five of them en suite, and is decorated in a neutral style with white walls.

Downstairs, a large open living area with a huge German Hakka-designed kitchen and Miele appliances flows into a big family/entertaining area, a large dinning room, study, two en suite bedrooms, a guest powder room, laundry and maid’s room.

Upstairs, there are three en suite bedrooms and a large extended master suite all finished with Bagno Design and German Home bathroom suites and imported Spanish flooring.

The exterior is as sumptuous as the interior – open the by-folding doors on to the private plot and you’ll find an outdoor entertainment area with a large swimming pool, Jacuzzi, sunken seating area, bespoke BBQ and bar area, and a large sunbathing and lawn space. The villa is also close to the infinity community pool and park area.

Q&A:

Luke Jones, luxury sales director for Luxhabitat, the agent marketing the Dh16.4m property, tells Andrew Scott more about the villa:

What is the reason for buying this villa?

For a start it’s an Emaar development, which means the No 1 Dubai government developer has built and developed the community. It is a sub-set of Arabian Ranches which is a self-sufficient community which very few other communities, at this level, can claim. One has access to schools, golf clubs, mosques, gyms, bars and restaurants. The Ranches is one of the most established areas in Dubai and that, with the exclusivity of these villas, means you are buying into more than just a villa. Of course there are also the polo fields on your doorstep which no other development can lay claim to.

Dh16.4 million sounds expensive for a desert villa community.

It is expensive but it’s not at the top-end of prices for villas; the top end is from Dh30m to Dh50m. With the Polo villas, Emaar allowed customers to buy the shell and core – the outer walls and the roof – of the units and develop the interior themselves. That means that every villa is unique and has been finished in varying degrees of opulence.

Who is the seller?

No one has ever lived in this villa, it was bought by an investor and has been on the market for six months. The property market has been slow for the past 18 months therefore it is very much a buyers market out there and there is a disconnect between the asking price and the transaction price.

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Dh16.4 million Polo Home villa is out-of-the-way luxury

The address of this property claims it is located in Arabian Ranches, but it is technically down the road a little bit.

However, it has an exclusivity all of its own.

While the Ranches has carved out a niche for itself as Emaar’s suburban development inhabited by firmly middle-class types, Emaar’s Polo Homes development is located behind the Dubai Polo Equestrian Club on Al Qudra Road.

This K-Type villa has an asking price of Dh16.4 million, a figure justified by it’s 18,000 square foot plot and views over the vast green fields of the polo club – a view often accompanied by the muffled gallop of horses.

Officially opened in April 2006, the club now offers a gym, pool, restaurants, bars, spa, stables and vets. Situated next to Studio City, it sits opposite Arabian Ranches 1 and 2, which has a golf course and new communities springing up – almost daily – around it.

Polo Homes is made up of 71 villas surrounding the two polo fields.

The villa, which has been extended to more than 8,000 sq ft of modified built-up area, sits in a quiet cul de sac. It has six bedrooms, five of them en suite, and is decorated in a neutral style with white walls.

Downstairs, a large open living area with a huge German Hakka-designed kitchen and Miele appliances flows into a big family/entertaining area, a large dinning room, study, two en suite bedrooms, a guest powder room, laundry and maid’s room.

Upstairs, there are three en suite bedrooms and a large extended master suite all finished with Bagno Design and German Home bathroom suites and imported Spanish flooring.

The exterior is as sumptuous as the interior – open the by-folding doors on to the private plot and you’ll find an outdoor entertainment area with a large swimming pool, Jacuzzi, sunken seating area, bespoke BBQ and bar area, and a large sunbathing and lawn space. The villa is also close to the infinity community pool and park area.

Q&A:

Luke Jones, luxury sales director for Luxhabitat, the agent marketing the Dh16.4m property, tells Andrew Scott more about the villa:

What is the reason for buying this villa?

For a start it’s an Emaar development, which means the No 1 Dubai government developer has built and developed the community. It is a sub-set of Arabian Ranches which is a self-sufficient community which very few other communities, at this level, can claim. One has access to schools, golf clubs, mosques, gyms, bars and restaurants. The Ranches is one of the most established areas in Dubai and that, with the exclusivity of these villas, means you are buying into more than just a villa. Of course there are also the polo fields on your doorstep which no other development can lay claim to.

Dh16.4 million sounds expensive for a desert villa community.

It is expensive but it’s not at the top-end of prices for villas; the top end is from Dh30m to Dh50m. With the Polo villas, Emaar allowed customers to buy the shell and core – the outer walls and the roof – of the units and develop the interior themselves. That means that every villa is unique and has been finished in varying degrees of opulence.

Who is the seller?

No one has ever lived in this villa, it was bought by an investor and has been on the market for six months. The property market has been slow for the past 18 months therefore it is very much a buyers market out there and there is a disconnect between the asking price and the transaction price.

ascott@thenational.ae

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