RIYADH: UAE-based Apparel Group is strengthening its presence in Saudi Arabia’s retail sector through strategic partnerships and expansion as the Kingdom experiences a surge in new mall developments.
Speaking to Arab News on the sidelines of the Retail Leaders Circle Global Forum in Riyadh, the CEO of the group, Neeraj Teckchandani, highlighted the company’s commitment to growth in the Saudi market.
“There are a lot of the landlords over here and partners with whom we work. So we signed a MoU yesterday with Point, the new mall from the Red Sea Mall group, which is coming in the sea region where we have taken a significant position. And, there is another one which we are signing this afternoon at Mall Of Dhahran,” Teckchandani said.
He highlighted the company’s strategy of expanding through partnerships with mall developers. “These are all strategic partnerships which we work with these landlords. And whenever there is a new mall coming, we will take a larger position over there. And those are the MoUs we have signed. So we have signed two of them, Mall Of Dhahran as well as Point.”
The Kingdom’s retail sector is undergoing a transformation, with significant investments in mall developments. “There are about 30 malls which are coming in Saudi over the next five years. I don’t think that any other Gulf country has got that number of malls coming up or even combined.”
The CEO added: “Saudi is evolving, we have avenues in Riyadh coming. We have a lot of malls coming from Cenomi Centers and so on. So, for us, the growth potential is huge in Saudi. Last year, of the 250 stores that we opened in the Gulf, nearly 150 were in Saudi Arabia.”
The company is increasingly expanding its brand portfolio and footprint in the Kingdom. “So in terms of the investments, there is a lot. We signed about 28 new brands last year. We took over from other operators like Cenomi Retail or Alyasra or AlMalki or Landmark Group Saudi Arabia branch, some across the region, some Saudi specific. So, we did that for eight of the brands. So we have a lot of expansion that way,” Teckchandani said.
The top official added that Apparel Group is set to open close to 300 stores in the region, and Saudi Arabia would be home to around 180 to 200 of them. “So big expansion plans, and we are also putting a lot of the investments into the hard infrastructure. So we are building a new distribution center in Dubai, and a new one in Qatar. And we have just finished the one in Saudi.”
He also underlined the importance of preparing for future retail demands. “We have so much expansion coming in the next three to five years in Saudi Arabia. So we are investing a lot in terms of infrastructure, hard, whether it is a distribution center or device or the soft, we’re putting the retail academy, upskilling the talent and so on for the growth that we’re in charge of over the next couple of years.”
According to Teckchandani, the evolution of the retail sector in the Kingdom presents numerous possibilities: “I think a lot of opportunities that way, as I mentioned, over 30 malls coming in the region gives huge opportunities.”
He added: “Saudi lacks mega malls like a Dubai mall or an Avenues Kuwait. So we will see the first one with Avenues Riyadh coming up that will lift the level of retail to the next level.”
While the retail sector faces some challenges, Teckchandani does not see major threats apart from geopolitical factors.
Apparel Group is also focusing on omnichannel integration to enhance customer experience. “Today, for all the major retailers, it’s an omni channel, and so all of them are offline and online as well.”
The CEO added: “All of our 2,000-plus stores, our 14 brand.coms and 61 marketplaces are seamlessly connected. I have a single view of inventory and this is available everywhere.”
As part of its expansion, the company has signed multiple brands across fashion, beauty, home, and food and beverage, including Koton, Sur La Table, Estée Lauder, and Allo Beirut. “So, in every segment, we have signed new brands. Some have already opened in Saudi Arabia, while others are in the phase of opening.”
Understanding and adapting to consumer trends is key to long-term success in the retail industry, according to Teckchandani: “I think you always have to see the relevance and you always have to remain relevant for your customer because you have to understand what the customer wants.”
He added: “You can get the initial hype because of the brand power, but if you don’t remain relevant or don’t hear your customer’s voice, you will be left out. I mean, the customer will move on and we have seen this with so many brands who left the region.”
Looking ahead, Teckchandani sees experiential retail as the next major trend shaping the sector. “Whether it’s retail or F&B, it has to be more experiential, you cannot be just transactional or selling a commodity. Gone are the days when you were just selling a piece of gummy or a footwear.”
The top official emphasized that digital elements and an omnichannel experience at the store are necessary.
While an initial public offering is on Apparel Group’s horizon, it is not an immediate priority. “Early days for us, I would say, definitely there are plans in the medium term, but not in the near term. We will be looking at something in the range of three to five years from today,” the CEO said.
