The discreet automatic door on Rue Moutran creaks open. On the left is a tinkling, indoor waterfall and, at the top of the narrow flight of stairs, an immaculately groomed personal assistant glides out from behind a desk. Earl Grey? Sure, why not? Then it’s into a vast office where tan hides and white sheepskins mingle with bold timbers. Luxury and functionality set off by a vast, colorful canvas.
Tony Salameh enters and sits down. He looks at his watch. One senses the clock has started. The suit is dark blue with a discreet pinstripe, the tie a pale blue, jacquard weave. The knot is biggish and rakishly askew. The hair neat but ruffled with a few dabs of gel. The tea arrives, steaming in what appears to be a pewter beaker with a pleasing leather handle. Welcome to Tony’s world.
On the up
At just 39, Salameh is arguably; well surely it is beyond argument, the darling of the local retail clothing sector. In fact, let’s give him his geographical due and change local to regional. His Aïshti (“I love” in Japanese) outlets carry some of the world’s most visible and most famous, high-end fashion labels – Prada, Gucci, Fendi, YSL, Dolce & Gabbana, Missoni and the like – while Aïzone, a youthful diffusion label, caters to young hipsters.
In fact, Aïshti has metastasized into a lifestyle brand with, a beauty spa and the magazine. There are plans for an art gallery and even talk of a boutique hotel. The brand, has become a byword for luxury living and the gospel is spreading, especially in the Gulf, where Aïshti has a fervent and, more importantly, affluent customer base.
When Salameh signed the lease for the Moutran properties in 1999, he doubtlessly envisioned trading in the prosperous shadow of the luxurious Souks shopping development. The Souks stalled in the quagmire of Lebanese politics but the Downtown was offered another, arguably more lucrative lifeline as, in the post 9/11 world, Lebanon became the destination of choice for Arab tourists. Today, Salameh claims that roughly 45% of his customers are foreigners, the overwhelmingly majority GCC nationals.
And they love him for it. So much so, that he has opened a 2,500m2 Aïzone in Dubai and is planning two more outlets in the Emirate (one to open in September and another in February 2007) taking his total shop space there to nearly 10,000m2. He will also open in Amman in December and expects to be in Bahrain by the end of 2007. “We are committed to the Dubai projects. They are happening,” Salameh says with supreme confidence. “In Jordan, we will start with a 1,300m2 Aïzone but within two years we hope to have a 6,000m2 fully-fledged Aïshti store.”
And this is why, in 2005, despite the bombs and demonstrations, the Aïshti empire, according to Salameh, clocked up roughly $100 million in revenues. With his regional outlets in place, Salameh expects that figure to rise to $120 million by the end of 2006. In total, he has over 20,000m2 of retail space, a figure that he is confident will rise to 60,000m2 by 2011. By then he fully expects the company to be worth $500 million with a presence in every country in the Middle East and turnover from Lebanese outlets to be hitting $230 million, a figure that today would represent a shade under 10% of the entire local retail sector (including supermarkets) and approximately 1.2% of Lebanon’s current GDP.
Not surprisingly, everyone wants a piece of the action. “On a daily basis I get calls from private equity managers, IPO requests, people who want to be shareholders and franchisees.” Salameh sips his water. “It’s really something. We receive about five emails a day from interested parties as far apart as Dubai, Texas, and Berlin.” So what is the company worth today? “Well.” Salameh sighs and sits back. “We recently began an evaluation with Ernst & Young but it is still premature. We are still expanding and we will show our real potential in around 18 months. But today if I had to put a figure on it, I would say around $250 million but I think that within the coming years we should soon double that figure.”
Not bad for a law student who began life importing remaindered stock from Italy to sell to his friends. It is a story that Salameh is happy to tell. “I was at USJ in the late 80s. It was during the war but nonetheless I traveled a lot to bring back outfits for myself and friends. I liked to travel. I had a curiosity. Before I studied law, I went to the South of France to study dentistry. I went with some friends but didn’t really enjoy the studies. Fashion and architecture was always my thing.” He pauses. “And travel. I would go abroad at any opportunity even when there were no planes and you had to take a boat to Cyprus to catch a flight. And of course I brought back my goods.”
Building the brand
Salameh’s first outlet was a warehouse in Jal al Dib and the locale is still very much within the Aïshti compass. At first he easily shifted his stock but soon he realized that his customers were demanding newer lines. “They were more sophisticated than I thought,” he remembers. “They would bring me magazines showing the latest collections and tell me they wanted this suit and that jacket. It was not enough that I was bringing stock and this is what led to [the creation of] Aïshti. I had to satisfy demand.”
Salameh admits he was young and had to work hard to convince suppliers to deal with him. “At first no one took me seriously, but then when you show your first letter of credit, they work with you. But if I had to pinpoint two concerns they might have had at the time, they would be my age and the fact I came from Lebanon, a country at war, but by 1992 or 1993 [the suppliers] relaxed when they saw that I could build brands.”
And he has certainly demonstrated a flair for taking brands and unraveling them in front of a label hungry Lebanese public. Take Ermenegildo Zegna: at one point the company was selling a mere 40 suits a year in Lebanon; now Aïshti shifts over 2000. “I defy anyone else to carry the brands we have with the same professionalism, the events we stage, the volume and coordination, the demand and the image.”
And there are others. In the UK, Burberry might have passed the apex of its recent renaissance, but in Lebanon Salameh is ecstatic about its performance: “No one had heard of it. Now it is going phenomenally, as are Dolce & Gabbana, Chloé, Cavalli, Gucci and of course Zegna,” he enthuses, adding, “I get satisfaction out of every single brand. To me it is a prima donna. We are always convinced of potential and it is a pleasure to deal with [these brands].”
Because Salameh believes he offers his brands the best service. “We have the human resources and the experience. We have shown we can do a lot of things. They trust us. For example, Cartier really like what we are doing. We are known as the only company that can promote luxury in the Middle East. We do the best events and have the best people. Within five years we will be in every country in the Middle East.”
Hard work
He cites being punctual with payment and respecting relationships as key to his success. He also admits he learnt a lot from the Italians and their work ethic. “I always thought they lived the dolce vita, but, especially in Milan they work very hard and take themselves very seriously.” It has stood him in good stead. “Even during the war I always respected commitments and when Hariri was killed and we faced a national crisis, I still took my orders. I could have told them we have a force majeure in Beirut in 2005 but I didn’t.”
Although his parents are now very proud of his achievements (Salameh’s brothers and sisters are also shareholders in the company) it was not always thus. “At first they did not take me seriously, although we were not worried. I was young and they thought it was a fad. Today it’s a different game.” He chuckles “Also, I am married with three children. I must be serious.”
Salameh’s family is his main preoccupation outside his work, although he does admit to a fondness for skiing and even skydiving.
“But really I enjoy working,” he concedes. “My wife tells me it’s my favorite hobby. I am always focused on what I do. I work in beauty and glamour. It’s a great life. I guess I am lucky.”
We move back to the story of Aïshti’s ascendancy. By the early 90s, Salameh had opened in Mar Elias, racking up outlets in Verdun, Sofil, Jal al Dib and Avenue Charles Malek, before heading for the mother ship in the Downtown and by 1994 he had retained Saatchi and Saatchi as his ad agency. Not all the locations are still there, but his retail spoor is a testament to his belief that renting offers greater flexibility. “We don’t own a lot,” he explains. “Renting is tax deductible. The Lebanese are not used to declaring but you can amortize the decoration over five years. OK, our back-offices are owned as is Aïshti Seaside but if you want to expand quickly in Beirut, you can’t own.”
Salameh rented his Downtown shops in 1999 in a $1.5 million deal that secured him a chunk of prime downtown real estate between Rues Foch and Allenby at an average of $300/m2. “We have made the area,” he beams. “Today we are the major tenant. Now there is a spa and a restaurant and we have our mono-brand [shops] Gucci, Cartier, Zegna, Diesel and Celine.” Aïshti is also committed to the delayed Souks project. “[Solidere chairman] Dr [Nasser] Chamaa is building with excellent materials. It is a modern mall and we will be there with our international brands.”
Structured company
But Salameh is keen to stress that Aïshti is not run like a family business. “Unlike many [companies in Lebanon] that have no structure, we have a serious back office from IT to transaction control dept to the financials. Today, we are working in Lebanon to create a solid structure and get the best people helping us to take the company regional.”
Indeed, regional expansion seems to be the buzz word for Aïshti. But is it to avoid putting all Aïshti’s retail eggs in one local basket? “No not at all people,” counters Salameh. “People tell me, ‘Bravo! You are opening elsewhere, but to tell you the truth I am satisfied with Lebanon. In 2005, we absorbed the shock. It was business as usual we had our structure and we had our overheads. So for us it is not a matter of diversity. It is a matter of exporting know-how. We know our [foreign] customers more than the Europeans and maybe even better than the sales staff in their own country. Therefore we need to be regional.”
Which begs the question will Aïshti ever move beyond the comfort zone of the Middle East? “Well I told you about the enquiries from Berlin so that may be a possibility. If we had the money and the resources I would have opened in Italy. I know it very well. I speak Italian. I have an office. I have staff, so maybe if we have an IPO and the right business partners we would consider Italy.” I ask him if Eastern Europe, especially the conspicuous spending new Russians, might offer rich pickings. “I get a lot of requests but it’s not really an area I know that well.” Enough said.
Aïzone is a concept that is close to his heart and one that has huge regional roll out potential. I venture that Aïzone is to Aïshti what Emporio was to Armani but I am quickly shot down. “No, no, no. That was 15 years ago, the 80s. Now we have a lifestyle with more choices. Tops, jogging suits and jeans. Less pretentious.” We have over 100 brands. We can pick. We can mix and match.”
On the map
Well, how does a man with a finger on the fashion’s throbbing pulse see himself? “I like jeans but I am essentially a conservative guy. I like blues and grays for suits. Something from Zegna or bespoke.” And on women? How does he see like to see the modern Lebanese woman? He pauses, perhaps in search of answer that will not offend. “I like the classics. I like it when they mix and match.” Has he changed the way Lebanese dress? “Yes. In particular the men. They have become more classical, especially after the war. Lebanese men have become more fashionable, easier in themselves, more natural. I would like to think we have contributed a lot to this.”
But sartorial philosophic musings aside, Salameh and his Aïshti brand are also bona fide ambassadors for Lebanon and the Lebanese economy. Aïshti has become a byword for the new Lebanon. When Viscount Linley, nephew of Queen Elizabeth II, and his wife dropped into Beirut in November, their host, no doubt wanting to show off the best Lebanon had to offer, took the couple to the Aïshti flagship store on Moutran. Linley, no slouch in the clothing department himself and a furniture designer of international repute, would have approved. The message would have reached the dinner tables of Belgravia and Chelsea, ensuring another tile was added to the mosaic of a cool and trendy new Lebanon.
National pride
For his part Salameh believes in his country. As well as lending his name to worthy business initiatives like Bader, he is keen to stress the positive aspects of the Lebanese way of life, the superior shopping ambience, the inherent culture, the still competitive prices and what he believes are the best salespeople in the Middle East. “Our foreign customers enjoy our way of doing things.” But what about our shortcomings? “Yes, there still needs to be [more] regulation and infrastructure,” he says before his enthusiasm for the positive regains control. “You must understand that we have no real competition, not even Dubai, which has no hub. Here we have beautiful pedestrian streets. We are sophisticated. We have a different flavor.” By now he is in full stride. “Look, Lebanon is the land of opportunity. You can buy land in Beirut today and double your money in a year. You can’t do this anywhere else. But you have to work. People don’t see me and that is because you don’t make money attending dinners. I am busy building what I want to build the most important, privately-owned retail business in the world.”
Outside the Downtown, as well as the successful Aïzone at the ABC Ashrafieh, Salameh operates Aïshti Seaside and the soon to be revamped Black Box in Jal al Dib. Have the last two proved to be white elephants? He laughs. “It is good that no one can see what we see. It has clear advantages. We are still buying land. It is visible. It is on the water and people, who have held fashion shows there like Chloé, cannot get enough of it. It is an affluent catchment area, the entrance to Beirut. In the long run it will work. It will be a promenade, mixing art and fashion in a cool environment by the sea.”
Then there is that magazine. Surely an extravagance? Not a bit of it. “Our suppliers love it. They ask for more. They tell me that even if they stop dealing with us they want us to send it to them. It’s a great marketing tool, a nice business card. It is my baby. I cannot wait for it to come out and see the cover.” Salameh admits it was initially a huge investment but one which is repaying the debt of faith by now paying for itself. As well as being a vehicle for Aïshti brands, it is now attracting ads from other makes, keen to align themselves with Salameh’s white hot labels and his affluent readers. It is also good news for Lebanon, which could do with a bit of pizzazz to counter the standard image of bombs, beards and chaos. “It’s promotion for the country,” Salameh explains proudly. “We send 500 copies to our suppliers by DHL. The CEOs of all the fashion houses all want a copy to take home. We use international photographers and contributors from all over the world. It is our vision of how we see things. We couldn’t find the right vehicle for our brands so we did it ourselves.”
Rumors
Of course success and recognition come at a price. In Salameh’s case it has been the rumors that his empire is nothing more than a front for a money laundering operation. How else does one explain the extravagance and the rapid expansion? So what does Tony Salameh say to those people who say he is shady? Salameh rubs his eyes, no doubt tired of the insinuations. “Nothing shady can last. Everything is discovered in the end,” he says, perhaps referring to other profligate but short-lived retail adventures. “Many of our competitors have tried to get our brands but have failed and so the easiest thing to do is to create [stories] and be hilarious about how we are succeeding. I want competition. I have heard a lot of these stories but in the meantime I have been busy building a company.” There is a silence. “Listen. How could I have been audited by one of the big four [auditing firms], bank with HSBC from day one, with BNPI and the big Lebanese banks such as Fransabank, Banque de la Méditerranée Audi-Saradar and be able to represent all these brands if there was the slightest hint of money laundering. I have gone to meetings where people have said, ‘oh are you sure Tony Salameh is coming? I heard he was in jail.’ I haven’t even had a parking ticket in my life. They can’t accept that I am clean especially in a country where there is money laundering, but the truth is,” he pauses. “Our shop windows are the truth?”
As Keat’s wrote, “Beauty is truth, truth beauty – that is all ye know on earth, and all ye need to know.” In Tony’s world at least.
