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29 March 2024

Big money in budget buys

Matalan offers something for everyone. (XAVIER WILSON)

Published
By Keith J Fernandez

Value retailer Matalan is among the beneficiaries of the global recession. In contrast to competitors such as Woolworths, who have been forced to shut their doors in recent months, the budget British brand is on an accelerated expansion drive and has opened its first overseas store in Dubai.

The new shop, which was inaugurated at Mirdiff's Arabian Centre mall on Thursday, is part of a franchise agreement with Qatar-based retail developers Business Trading Company.

This is the second Matalan store in the region after an opening in Amman this June, and BTC Chairman Abdul Aziz Al Rabban tells Emirates Business that he wants to open 30 outlets in the Middle East, with the UAE home to "at least eight" of these.

"There's a good side to the recession; it has opened a lot of doors for us," Al Rabban says, talking of how representatives from 20 malls regionwide have rung his team in the past week. "We can now have a presence in a mall, we can negotiate. Today we are welcomed. We can demand,"?he says. That's a pleasant change from the boom years, when retail space was hard to come by.

Matalan is primarily a fashion and homeware retailer, offering a range of garments and accessories for men, women and children. In the United Kingdom, it also retails mobile phones and has expanded to offer books, jewellery and a hearing services ?section. The UAE offering is ?currently restricted to garments and ?accessories, but home furnishings will be added to the mix as the retailer is able to lease bigger stores.

"In the United Kingdom, Matalan occupies a unique niche in the market, offering quality products at supermarket and midmarket prices," says Alistair McGeorge, CEO, Matalan. "We're bringing that same value proposition to Dubai."

While Emirates Business has not had a chance to test the quality, the price is right for the recessionista: women's jeans were in the region of Dh60, and on a walk down the store's menswear aisles, we spotted business suits priced between Dh252 and Dh378, polo shirts at Dh68 and keffiyehs at Dh26.

Unlike retailers who price merchandise in the UAE above UK?prices in an attempt to position themselves as a prestigious buy, Matalan aims to maintain price parity with its UK stores.

Much of the merchandise comprises own-brand labels, but Matalan stocks such names as Calvin Klein, Jeff Banks and Wrangler. Yet, canny shoppers might quibble about the exchange rate. For example, a £5 (Dh30) pack of shorts is marked Dh42.

However, in a year that has seen sales of everything low-cost – from airline tickets to confectionary items – go through the roof, an economy formula is certainly the way ?forward. Al Rabban says footfall at the Matalan store in Amman is three or four times that of other tenants in the Al Baraka Mall, where it is situated.

Around the Middle East, he adds, plans are already in place for stores in Abu Dhabi (at Dalma Mall, which is under construction) and in Bahrain, while negotiations are underway for properties in Egypt, Lebanon, Saudi Arabia and Libya.

In terms of business projections, he expects each establishment in the region to generate revenues of around Dh30 million a year.

And new stores are planned in the UK, too.

The first Matalan opened in 1985 and the majority of stores are based in out-of-town locations. Founded by John Hargreaves, who was inspired by a concept that proved successful in the United States, the company now has more than 200 stores and some five million square feet of retail space in the UK.

It was privatised in 2006 by a firm controlled by the Hargreaves family.

The destination store concept has been tweaked along the way; some two-thirds of Matalan shops are sited in retail parks, while a small percentage are now on high streets or downtown areas.

Matalan has not opened a new UK store in five years but McGeorge now wants to increase the brand's portfolio 50 per cent to 300 over the next eight years or so.

He says it will open three over the next couple of months, and another six to 10 next year. And locations for a further 100 have been identified. "We aim to open about 15 new stores a year [in the UK]," he says, agreeing that the concept is ripe for export to other parts of the world, but remaining ?circumspect on details.

The company has made headlines recently with a recruitment drive; it will hire 1,800 staff over the rest of the year, of which 300 people will find permanent employment with the chain.

For them, too, then, there's a good side to this miserable downturn.



Pocket-Friendly Prices

Daiso

A joint venture between Damas and the Lal's Group, Daiso is Japan's premier chain of value stores and retails everything from homeware to gifts, food, stationery, cosmetics and traditional Japanese household items. It has nine stores in the UAE.


H&M

The Swedish international retailer opened in the UAE in 2006, following a franchise deal with MH Alshaya. It offers wardrobe essentials alongside pocket-friendly high fashion and is now available across the GCC.


Express

The American specialty fashion ?retailer is marketed as offering ?modern style for young fashion-?forward men and women. The brand was launched in the UAE this year with a store at Dubai Mall.


Jeanswest

The Australian denim retailer was launched in 1972 but opened its first outlet in Dubai this year after a franchise deal with the Apparel group.


New Look

Landmark International brought the British clothing retailer to Deira City?Centre (below) in 2006. Launched as a brand for women in the 16-30 age bracket, it diversified into menswear in 2001. The company has four stores in the UAE with several more in the works.

 

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