Landmark targets Dh200m expansion

The Landmark Group plans to become the biggest mid-market retail player in the Middle East and North Africa (Mena) in the next three years, a top official said.

The UAE-based company is looking at beefing up the number of Centrepoint outlets by 10 per cent to 71 by the year-end, by adding four more in Saudi Arabia, two in the UAE and one in Bahrain.

Centrepoint, which houses Babyshop, Splash, Shoe Mart and Lifestyle brands under one roof, currently has 64 outlets in the Gulf Cooperation Council (GCC) states and Jordan. Capital investment for the seven additional shops is estimated at Dh200 million.

"Setting up each Centrepoint store would cost us between $7m (Dh25.71m) and $8m. We don't compromise on the quality of fixtures, which mostly come from Italy," Vinod Talreja, Director of Centrepoint and Board Member, Landmark Group told Emirates Business.

"We are already the largest player in the GCC and want to expand into Mena countries," he said. The company is also in "serious discussions" with prospective partners in Egypt, Lebanon, Syria, Morocco, Turkey and Libya and is looking at closing some of those deals this year.

"It is more of a joint venture," Talreja said, noting that there is a good split between new or existing malls and standalone properties. "We will open as many Centrepoint stores as we can in Mena countries," he said.

"I can't give a target number as yet because these are virgin markets for us. If the GCC can take 80 Centrepoint stores, then we can do the same in the Mena region as these countries are large. We would like to be in all countries and all major cities."

Babyshop, one of the oldest concepts of Landmark, is also on track for expansion – either as part of the Centrepoint chain or on a standalone basis. Babyshop, which has been in the market for 20 years now, plans to see 10 per cent year-on-year growth in outlets over the next three years.

The children's clothes and apparel retailer currently has 104 shops in the region and will open 12 more this year, with an eye on having a total of 150 shops by 2013.

Stores are generally not profitable in the first year of operations but are likely to break even in the second, said Talreja, who is also CEO of Babyshop. As for opening shops this year, all funding has already been secured both from Landmark Group equity and through loans from about 10 banks, he said.

"We talked to about 10 banks, some of which are local and others are international," he said. "Landmark reinvests a lot of its profits in the business so the financial position has been pretty strong. It has very good relations and reputation with bankers."

Centrepoint has the highest number of outlets in Saudi Arabia, where it owns 36 shops, followed by the UAE with 10. Kuwait has seven, Oman and Bahrain each have four stores and there is one shop each in Qatar, Egypt and Jordan.

Babyshop's biggest market is Saudi Arabia with 50 stores followed by the UAE with 23. There are seven shops each in Oman and Kuwait; six in Bahrain; and three in Qatar. Likewise, Pakistan has four shops; Egypt, two; and Jordan and Yemen, one each. Landmark also entered China with the opening of its first Babyshop store in 2007.

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