|Local retail titan ABC develops regional presence
|Jordan to follow bahrain in october
ABC Group, Lebanon's largest retail developer, is expanding into Jordan and Bahrain, an example of yet another Lebanese company seeking customers abroad (...)
(...) with the local market either saturated or suffocated by the continuing political turmoil. ABC Group opened an outpost in Bahrain's Seefa mall two months ago and will christen a branch at Amman's Al-Baraka mall in October, said ABC marketing manager Tania Ezzedine. The expansion plans were hatched long before last summer's war with Israel, as ABC covered the domestic market with outlets in Tripoli, Zahle and Kaslik, in addition to its various Beirut locales.
Along with ubiquitous brands such as Virgin and Aishti, ABC falls into the category of merchants for whom regional growth came naturally as they neared the limits of the relatively small Lebanese market, while other enterprises have turned their sights abroad only in the wake of the economic devastation caused by the war and the ensuing political turmoil.
The political squabbling has paradoxically helped keep sales afloat at ABC during the economic malaise, as shoppers have continued to flow into ABC's mall in Achrafieh with most shops closed in the Beirut Central District. In spite of the war and its aftermath, revenues for 2006 at ABC in Achrafieh exceeded the numbers from 2005, while income at the Dbayyeh flagship was roughly the same as the previous year.
"We're doing very well here despite what's happening," Ezzedine said.
ABC poured about $6 million into its 1,500-square-meter Bahrain store, which will offer mostly women's fashions. The branch will have a staff of approximately 20 employees, compared to the 100 planned for the 4,500-square-meter department store in Amman. The Jordan ABC will resemble the Achrafieh one, with boutiques for the Chanel and Kookai brands.
Next year could also see branches in Kuwait, Qatar and Syria for ABC, which has estimated assets of more than $100 million. The Fadel family owns 80 percent of ABC Group, with the remaining equity dispersed among some 100 shareholders.
Strong balance sheets also typify other big-name Lebanese companies that put up shingles elsewhere in the region. Among restaurants, for instance, recognizable names such as Kabab-ji, Crepaway, Casper & Gambini's and Water Lemon have launched outposts throughout the Middle East over the past few years.
On the other hand, other eateries such as Al-Balad have decided to try their luck across the border when faced with the daunting political and economic climate at home, said Paul Ariss, president of the Syndicate of Restaurant and Cafe Owners. The Larissa bakery, another case in point, has recently opened outlets in Jeddah and Riyadh.
Whether a company has planned expansion for years or been pushed into it by the circumstances, the moribund Lebanese market allows entrepreneurs to devote more attention to foreign ventures, said Aishti CEO Tony Salameh.
"Because of what is happening here, we're going faster and faster," said Salameh, who opened a branch in Jordan a week ago. "Sometimes it's easier when you're not really busy here. Instead of sending people home, you can send them abroad."
With sales flagging here, Salameh has sent some of Aishti's Lebanese staff to Jordan, and with branches slated for Bahrain and Qatar in the next 12 months, other personnel might follow. With a Dubai shop launched in 2005, Aishti's expansion has been a long-term project independent of the war, and ambitious Lebanese traders have traditionally eyed foreign markets because of the limited dimensions of their home turf.
"Lebanese think they have the know-how," Salameh told The Daily Star on Sunday. "In the long run, everybody had that strategy. The market now is saturated - the market is becoming more and more regional."
The Daily Star