Despite many new brands entering the Beirut market for the first time this year, a large number of existing shops have chosen to use the revival of downtown Beirut and the inauguration of the Souks to open up new stores and increase their brand exposure — a potentially pricey risk in such a small market.
“The idea of mono-brand outlets is relatively new here in Beirut and I think it reflects an increased interest by big-name brands in Lebanon and in the Middle East in general,” Stefano Macaluso, vice president of luxury watchmakers Girard-Perregaux, told Executive in July. “At a time when luxury watchmakers were tallying losses in Europe and the United States, sales soared in this region.”
Top-end retail executives seem to agree that having multiple points of sale even in a small country like Lebanon gives customers the most complete experience with the brand, making a more lasting imprint and, ultimately, financial sense.
“We find that whenever we open our stores nearby a place we already have distribution, the total distribution grows because you can see what the line [offers] much more,” said Jerome Griffith, chief executive officer of Tumi.
New strategy, new players
While the influx of mono-brand stores has not led to the abandoning of the very popular multi-brand stores, such as Aishti and Boutique 1, the trend has begun a wave of new fashion relationships between brands and local partners that defy the traditional requirements of exclusivity.
“[Exclusivity is] like protectionism,” Griffith said. “It’s not really good for overall business. You think it is, because at a fundamental level it makes sense that if I’m the only one that has a brand, then I’m the only one that sells it, but actually you don’t really gain a brand’s potential until that brand is seen multiple times, because a customer has to recognize [it].”
According to Izzat Traboulsi, managing director of Hugo Boss for the Middle East, the relationship between local or regional partners and the brands themselves has changed quite significantly since the mono-brand invasion.
Brands tend to maintain their own mono-brand points of sale and then work with a different local partner to open a direct franchise location, as opposed to hiring a company as an exclusive representative or independent agent of the brand, as is the case with Hugo Boss.
“Today the regional partners are already there. The set-up is already there. Today, lots of the emerging brands do it directly,” he said.
The shrugging-off of exclusivity is not yet universal, but should pave the way for more mono-brand stores to come.
As George Kern, chief executive officer of IWC Schaffhausen said, “There is no other way to express the brand [than] in a boutique. You cannot do it with a shelf.”