Al-Futtaim to expand in Asia



Al-Futtaim is expanding its footprint in Asia by adding stores under its Robinsons and Company unit, which operates brands such as Marks & Spencer (M&S) and John Little in Singapore and Malaysia.

It plans to double the number of M&S shops and Robinsons department stores in Asia over the next three years, said Robert Willett, the chief executive of Al-Futtaim Group. He said the purchase of the Singapore group was a stepping stone towards expanding further throughout Asia.

"We've invested nearly half a billion dollars in the acquisition of Robinsons and invested a lot since," he said. "We see Singapore as the platform for growth in Asia."

It has also appointed a new management team to oversee the push, he added.

In 2008, Al-Futtaim Group, a property and retail conglomerate with brands including IKEA and Toyota, took an 88 per cent stake in Robinsons with a cash bid made through the group's investment arm, Al-Futtaim Global Private Limited. After the purchase, Al-Futtaim delisted Robinsons.

Robinsons now has at least 25 stores across Singapore and Malaysia, including 15 M&S shops and three Robinsons department stores. Other brands include River Island and Coast.

While it has been a difficult year for retailers worldwide, Asia has been a bright spot for sales growth.

Non-grocery retail sales in Singapore last year totalled US$10.9 billion (Dh40.03bn) and is expected to steadily grow to $11.8bn by 2014, according to the research firm Euromonitor International. Although the unemployment rate in Singapore increased during the global downturn, a wave of new malls such as Orchard Central enticed consumers to continue shopping, according to the researcher.

Sales growth in Malaysia slowed amid economic uncertainty but continued nonetheless.

Non-grocery retail sales in Malaysia totalled $15.4bn last year and is expected to reach $16.8bn in 2014, data from Euromonitor show.

More shopping centres are on the way to serve the growing and increasingly affluent population.

"The development of new shopping malls, new land for hypermarkets and new trading hubs are expected to create opportunities for existing retailers to expand or entice new players to enter Malaysia," the research firm said in a recent report.

In addition to growing the network of M&S and Robinsons shops, Al-Futtaim plans to add more brands to the portfolio, said Mr Willett.

"We didn't buy it with the purpose of doing very little with it," he said. "The purpose was to buy it, enhance it, develop it and use it as a platform for further growth in Asia. Singapore is ideally situated."

Mr Willett said its brands were outperforming the market, where sales were growing at about 6 per cent or 7 per cent.

Other areas outside of the UAE Al-Futtaim is concentrating on include Qatar and Egypt. Last month, the group struck a $1.6bn deal to build a huge retail and leisure complex in Doha in what will be its biggest project since the onset of the financial crisis.

Construction is due to start early next year. Work is also under way on Cairo Festival City, a mixed-used community similar to the company's Dubai Festival City development.

"We're investing heavily in Doha … We're delighted we're in Egypt," Mr Willett said. "Egypt is such a huge growth opportunity. Are there problems there? Yes. Are there issues getting going in the market? But close your mind and think ahead where you want to be, you want to be in Egypt."

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For decades the UAE has granted two and three year visas to foreign workers, tied to their current employer. Now that's changing.

Last year, the UAE cabinet also approved providing 10-year visas to foreigners with investments in the UAE of at least Dh10 million, if non-real estate assets account for at least 60 per cent of the total. Investors can bring their spouses and children into the country.

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