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The Buzz

Business briefing: 30 July 2013

by Executive Staff July 30, 2013
written by Executive Staff

Palestinians and Israelis began peace talks in Washington.

 

A wave of car bombings targeting busy streets and markets killed at least 60 people in Iraq on Monday. This follows Sunday's blast that disabled the country's oil export pipeline to Turkey.

 

OPEC exports surged nearly 10 percent in value to $1.26 trillion in 2012.

 

Operations at Libya's main oil export terminals ground to a halt over the weekend due to strikes, Reuters reports. Meanwhile, the country's prime minister announced a government reshuffle.

 

Rents in Dubai are rising faster than wages, according to a new report.

 

Saudi Arabia awarded $22 billion in contracts to build a metro system in Riyadh. Among the winners were Almabani and Consolidated Contractors Company. The massive project aims to be complete in five years.

July 30, 2013 0 comments
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The Buzz

Business briefing: 29 July 2013

by Executive Staff July 29, 2013
written by Executive Staff

Economics and Policy

Gold edged lower on Monday after three weeks of gains.

More from Reuters

 

The Lebanese banking sector could see profits drop by up to 20 percent over the next year if the political stalemate in the country persists, the head of the Association of Banks in Lebanon has warned.

More from the Daily Star

 

Jordan plans to raise power prices after doubling taxes on cellphones to offset a large budget deficit, despite warnings that such measures will provoke a public outcry.

More from AFP

 

Iranian president-elect Hassan Rouhani is expected to restore the respected former oil minister, Bijan Zanganeh, to the post he held for eight years until hardline president Mahmoud Ahmadinejad came to office in 2005.

More from Reuters

 

Liberal and tribal alliances made the biggest gains in Kuwait's weekend elections, while Shiite representatives lost more than half their seats in the 50-member parliament.

More from The National

 

Tunisia's secular opposition is considering setting up an alternative "salvation government" to challenge the Islamist-led leadership.

More from Reuters

 

Companies and Business

Kuwaiti telecommunications operator Zain reported a 14 percent fall in its second-quarter net profit to $214m, mainly because of a currency loss in Sudan, according to Reuters calculations based on its first-half earnings statement.

More from Reuters

 

July 29, 2013 0 comments
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Business

Making the town buzz

by Tamara Rasamny July 26, 2013
written by Tamara Rasamny

Mustafa Sadek
Mustafa Sadek

Company:  UrbanBuz

Country:  United Arab Emirates

Industry: Company services

Founder: Mustafa Sadek

Established in: January 2013

Number of Employees:  5

 

After leaving the US for Dubai three years ago, Mustafa Sadek encountered an old college friend, Nehme Boghdadi.  Their 20-year-old friendship blossomed into a business partnership when the two discovered “there was a big opportunity” in another type of relationship: that between a company and its customers.

Sadek and Boghdadi had been in contact with small and medium-sized businesses (SMBs) and “realized that [SMBs] are really underserved in [the Gulf], in terms of the tools and the environment that they need to help them grow, compete, and mainly build their relationships with their customers.” Customer relations are more developed in the US than in the UAE and the region as a whole, which is where UrbanBuz fits in.

The pair, along with fellow co-founder Salam Saadeh, officially launched UrbanBuz in January 2013 as a platform for SMBs to design their own customer loyalty program.  These SMBs then engage and establish relationships with their customers, not only in the store, but outside of the store as well — meaning that customers can be engaged by collecting and redeeming points, accessing the company through social media websites, and more.

UrbanBuz is targeting smaller companies and “not going after the big guys” just yet.  It focuses on these SMBs because they usually lack the funding or resources to create their own customer loyalty system or pay for a very well established one.  Although Sadek did not reject the idea of targeting larger companies, he prefers keeping that option open for his long-term goals.

SMBs that are working with UrbanBuz range from beauty salons and restaurants to gyms and online businesses, across 35 locations in the UAE.  Although its focus has mainly been on Dubai, the company is finalizing agreements with businesses in Abu Dhabi as well.

UrbanBuz charges its customers a minimum monthly fee of $137 per location, although this may vary depending on how many locations a company has and what sector it belongs to. While it has not yet raised a significant amount of money, the outfit is going through its first round of funding.  “We’ve met with several investors and it is still ongoing,” says Sadek.  

Although Lebanese, Sadek has been focusing on funding from the UAE, and mentions that raising funds in Lebanon is not easy.  “It seems, to a large extent, investors are risk averse; they do not like to take risks on startup companies, especially if that startup company is a new model or new idea altogether,” he explains. Sadek does, however, note that the relationship between investors and startup companies has been developing.

Initial investment for the startup came from Sadek himself and an angel investor. Over the next five years, Sadek hopes to expand to take two percent of a regional market worth some $800 million per year. In comparison to the US, the Gulf market “is very open to a lot of ideas, technology, products; so it is full of opportunities,” he explains.

Despite this, setting up a company “was very tough,” says Sadek, who previously founded a startup in the US. Doing the same in the UAE is much more expensive, costing at least $5,000 — compared to the $300 to $400 that would be paid in the US.  It also takes one to two months to set up a company in the UAE, whereas it takes just a couple of days in the US.  Sadek also expresses his frustration at the challenges he faces with banks. “You have to open your account and then deal with the bank, getting a business credit card is a big hurdle. I do not know why.”

Competitors that Sadek mentions include Air Miles, Shukran, and SNAP. Air Miles is a loyalty network where loyalty customers get benefits on the Air Miles network. UrbanBuz, however, works slightly differently — allowing customers to have loyalty with specific businesses rather than a general network. “We do not interfere, we simply provide the tools,” he says.  Sadek also distinguishes UrbanBuz from other companies because it allows businesses “to set up and manage their own customer program and to better serve their customers, as opposed to traditional customer loyalty programs, where they give the businesses a direct solution that makes it hard to customize and manage.”

When it comes to expanding his business, Sadek says his main focus at the moment is expanding in the Gulf region and other countries outside such as Lebanon and Jordan.  When asked to elaborate on expanding to Lebanon, Sadek explains, “the challenge with Lebanon is that it is too small to think about it as a money-generating market, for a startup at least.” UrbanBuz does plan to expand to Lebanon, but is simply “looking at it as a market share,” and a way to increase its regional brand presence — not as a revenue source.

July 26, 2013 0 comments
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The Buzz

Business briefing: 26 July 2013

by Executive Staff July 26, 2013
written by Executive Staff

Economics & Policy

Iraqi insurgents are targeting the country's main northern pipeline, undermining efforts to rehabilitate and grow the hydrocarbons sector.

More from Reuters

 

Syria's civil war has halved this year's wheat harvest.

More from the Daily Star

 

Saudi Arabia is instituting a program to protect the wages of employees at large firms and all private schools.

More from Arabian Business

 

The IMF is refusing to enter loan negotiations with Egypt until the de facto government gains international recognition.

More from the Daily Star

 

Banking & Finance

The Qatari and Kuwaiti sovereign wealth funds are rumored to be eyeing a stake in Lloyds Banking Group, a major British financial institution.

More from Arabian Business

 

Companies & Business

State-owned Middle East Airlines has frozen dealings with other Lebanese state institutions over a financial dispute.

More from the Daily Star

July 26, 2013 0 comments
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Special Report

Piecing a city together

by Thomas Schellen July 25, 2013
written by Thomas Schellen

That the Lebanese economy is in a crisis seems so obvious that a description is uncalled for. Several luxury developers said this summer that they don’t have anything to announce and a few don’t even answer the phone or open their mail. Developer Joseph Mouawad told Executive in June that his company was yet to sell any apartments this year, and his peer Georges Chehwane said the market is stagnant due to high supply.

But there are insights to be gleaned. Outside of Beirut, development activity is altogether more energetic and fed by real demand. New marketing strategies and price-driven campaigns are important formulas for success, as demonstrated by developers Sayfco (see page 40) and projects such as Waterfront City in Dbayeh (see    page 62). 

Overall, though, the volume of property transactions was down 8.2 percent year-on-year (y-o-y) between January and May 2013, and values dropped 8.6 percent y-o-y over the same period. The share of foreigners in property transactions remains low at 1.82 percent and is down 71 basis points versus the peak in 2009, according to cadastre data analyzed by Credit Libanais Research. As Bank Audi Research communicated to the market last month, y-o-y, 12.4 percent fewer building permits were issued in the first four months of 2013, but the positive spin is that this is a necessary property market correction.   

Developers expect construction to proceed at a slower pace through 2016, roughly, as the existing building oversupply requires time to be sold off. In the meantime, Lebanese investors looking for real estate opportunities can take solace in the prowess of our financial players that have plunged successfully into market niches in Berlin (see page 66) and the United States (see page 72). 

beirut in the balance

The panoramic pictures of Beirut that Executive captured last month give indisputable evidence of the city’s continuing evolution toward greater urban density, ahead of the yet-to-happen statistics and pertinent research that are needed to fill in the details. Having those details and analyzing the investments needed to manage the realities created by the load of new buildings may very well become the differentiator between vibrancy and urban death for Beirut.

That is the insight offered by the Executive investigation of the Fouad Boutros road project in Ashrafieh (see page 50). The project has roused a high commotion in the public sphere, and no final decision about these 1.3 kilometers of asphalt will be free from negative repercussions. The scarcity of information about the road, however, highlights the disorder of our urban “development”, which has been disfigured by Lebanon’s convoluted system of disjointed public sector competencies and conflicted planning roles.

Beirut and Lebanon are known to be a mosaic of communities that the great Ghassan Tueni described grippingly in a speech in the late 1990s. Others used the same image, and noted sociologist Samir Khalaf once described Beirut as a “‘mosaic’ of distinct urban communities” and an “exploding metropolis”. That observation is a reason for reflection today, as Khalaf’s words were published exactly 40 summers ago, in 1973.

In this context, the Fouad Boutros controversy shows perhaps that a solution for Beirut’s development dilemma is as elusive as ever. Yet the hope one can derive from the controversy is that awareness of urban development problems is finally reaching the level of public discourse. Residents, non-governmental organizations, officials, experts, businesses, media, elected deputies — we are all valid stakeholders in the debate.

July 25, 2013 0 comments
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Society

Top 10 women’s watches

by Michael Karam July 25, 2013
written by Michael Karam

A carefully chosen watch can be an investment and a pleasure. Here are Executive's top 10 men's watches for 2013:

 

10 Tag Heuer Monaco

 


Sports bling cannot find finer expression than in this pimped-up classic.

 

 

 

 

9 Baume et Mercier Hampton


With the Hampton, B&M have shown you can own timeless elegance without breaking the bank.

 

 

8 Longines Grande Classique


Longines is reliable and timeless and never more so than with this enduring design.

 

 

 

7 Vacheron Constantin Patrimony Lady


A model that reeks of affluence and grandeur from one of the greatest watchmaking houses.
 

 

 

 

6 Jaeger-LeCoultre Squadra Lady Automatic


The classic Reverso is revamped for the girl about town. A watch for all occasions.
 

 

 

 

 

 

5 Patek Phillipe Calatrava

The ultimate in watchmaking precision and understated elegance.

 

 

 

 

4 Breitling Colt Oceane


Without sacrificing any of its steeliness, Breitling it has created a vibrant sports watch for women.
 

 

 

 

3 Rolex day-date

One of the most recognizable watch designs gets a makeover that is bold and beautiful without being garish.
 

 

 

 

2 Hermes H Hour


Fun, funky and sexy, this watch has quickly established itself as an informal classic.
 

 

 

 

 

 

 

1 Cartier Ballon Bleu


Beautiful, luxurious, quirky and stylish. What more could one ask from the house of Cartier?

July 25, 2013 0 comments
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The Buzz

Business briefing: 25 July 2013

by Executive Staff July 25, 2013
written by Executive Staff

Economics and Policy

Kuwait's investment environment is "repellent," according to a new report.

More from Arabian Business

 

The Syrian conflict is boosting demand for Lebanese industrial and pharmaceutical goods.

More from the Daily Star

 

Qatar's new ruler will continue to back the Syrian opposition, according to a rebel envoy.

More from the National

 

The operator of the electricity barges contracted to supply power to Lebanon is in breach of its contract, a government committee alleges.

More from the Daily Star

 

Companies and Business

Lending growth in Abu Dhabi has reached pre-crisis levels.

More from the National

 

Abu Dhabi National Oil Company's $10 billion Bab gas project is expected to see contracts awarded in 2015 with production beginning in 2020.

More from the National

July 25, 2013 0 comments
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Real Estate

Turning heritage into profit

by Nabila Rahhal July 24, 2013
written by Nabila Rahhal

A short walk in practically any area in Beirut — be it Hamra, Gemmayze, Zuqaq Al Blat or Ashrafieh — leaves one in awe at the neck-breaking speed at which Beirut’s urban structure is changing. High rises cast shadows on what is left of buildings dating back to the French and Ottoman mandate, and even most of those are being demolished to make way for more towers.

Yet the situation has created a backlash in the market where many young and affluent urbanites long for the simplicity and authenticity of architecture from the olden days — a sentiment that commercial establishments are making use of while preserving heritage at the same time. Today, some of Lebanon’s most beautiful and popular restaurants — such as The Gathering, Enab or Sud — have breathed new life into traditional homes by incorporating the architecture into their venue, a trend that is on the rise in the food and beverage industry.

The issue of preservation of heritage homes paints a dismal picture of a state wittingly or unwittingly playing into the greed of landowners and developers who, motivated by profit, cast a blind eye on heritage. “The state gave every incentive for people to tear down their heritage homes instead of renovating them,” says Giorgio Tarraf, founder of Save Beirut Heritage, a non-governmental organization that champions the protection of the city’s historical sites.

His words ring true when one considers the urban planning and the old rental laws. Karl Sarkis, general manager of Blox Real Estate Services, explains that the pre-1992 rental laws have the tenant paying miniscule amounts: “The average rent for a 200 square meter venue [according to pre-1992 laws is] around $80 per month. With this situation, how can the landlord of an old building maintain it? It’s not economically feasible for him to do so.”

These laws, coupled with the increasing price of land in key areas in the city, set the wrecking ball swinging for traditional architecture in Beirut. “The real catastrophe for heritage homes is our development and construction laws, which make it much more lucrative to build towers in the city instead of preserving a two-story heritage home,” says Khaled Rifai, an architectural inspector at the General Directorate of Heritage at the Ministry of Culture.

Despite what seems to be a losing battle, the Ministry of Culture, with backing from civil society, has made some efforts to preserve these traditional homes. Tarraf explains that in 1996, an NGO called the Association for Protecting Natural Sites and Old Buildings voluntarily did a tentative overview on the area surrounding downtown Beirut and came up with a list of 1,600 buildings to be preserved.

In 1999, Khatib and Alameh, a Lebanese construction company commissioned by the state, pared down the list — still limited to the area surrounding downtown — to 500 heritage buildings classified across five levels, with “A” being the most significant to save and “E” having the most damage. Those classified as either D or E could be torn down and so, today, only 250 of those classified remain, according to Rifai. “There was a game of influences happening at that time and classifications were based on the current state of the building, not its inherent value,” says Tarraf.

According to Rifai, focusing only on the areas surrounding downtown left a lot of unclassified heritage homes across Beirut, which is why in 2010 the Ministry of Culture decreed that no home in Beirut can be torn down without the ministry’s written consent. Though the ministry’s role remains advisory and the final decision to demolish a building lies with the Municipality of Beirut, Rifai is content with this step and says the ministry has saved 200 previously unclassified homes in the past three years, adding that the municipality has complied with their advice so far.

With only two architectural inspectors for heritage homes across all of Lebanon, Rifai admits that there is nothing they can do to prevent homeowners from intentionally damaging their property in the hopes of gaining a permit for its legal destruction. Rifai says, however, that the General Directorate refers cases where a building “suddenly” collapses to General Security. If it was a classified heritage building, the owner can be prevented from building on it or selling.

But real estate agents who spoke with Executive all disclosed that when an investor has enough influence, no classification stands in the way.

A sense of nostalgia

“The trend is changing and people are developing an appreciation for heritage homes, now seen as a luxury. There is an increased awareness from the public, and today a demolition of a house makes front-page news,” says Tarraf.

While cases of preserving heritage homes for residential purposes are rare, preserving them for commercial use is becoming more of a norm. Commercial uses include spaces for art galleries and banks, but perhaps the most profitable and successful venues are in hospitality, where heritage acts as a multiplier of commercial use value.

This trend of capitalizing on heritage has been growing, with approximately 25 restaurants in heritage homes across Ashrafieh, Gemmayze, Mar Mikhael and Hamra. This number is easily twice what it was five years ago, and it seems that around 10 percent of remaining registered heritage houses in Beirut are restaurants.

Blox’s Sarkis says he has noticed an increase in demand for old houses “with charm” among those interested in developing restaurants, as well as landlords who specifically ask him to put up their properties for rent as restaurants. He has recently rented two heritage homes in Mar Mikhael that will shortly be launched as restaurants and says that investors are interested in 10 heritage homes in the same area, but that they are tied up in inheritance issues.

Related articles: Beirut must develop horizontally

The full story of the Fouad Boutros Road

“90 percent of the old homes in Ras Beirut have been renovated into restaurants or furnished apartments,” says Anis Rebeiz, a real estate agent in Hamra, adding that, to his knowledge, there are no more heritage homes available for rent as restaurants in Hamra. “Whatever traditional homes are left in the area are either classified and cannot be played with or are forgotten by their owners, who are mainly abroad,” says Rebeiz. 

A rental lease for a restaurant is usually a long-term one, says Sarkis, and annual rent for a heritage home in Mar Mikhael is between $60,000 and $120,000, depending on the size of the land. “For landlords, renting their homes is profitable because they price the rent the same as if it was a floor in any building in that area, and usually restaurateurs choose areas that are already booming and so land price would be high,” explains Sarkis.

There are other reasons landlords might choose to rent their homes to restaurant owners: the home is too small to sell for a bigger development; the real estate market is in a slump, which makes it more financially sound to rent than sell; or simply because the owner appreciates heritage and would like to see it put to good use.

Converting a heritage home into a restaurant requires a deep appreciation for traditional architecture as well as a clear vision because the renovation process requires one to two years and a budget ranging between $750,000 and $2 million, according to restaurant owners. “Heritage homes are expensive to rent and expensive to renovate as opposed to other successful bars or restaurants built from scratch, which were much cheaper to develop,” says Ussama Makarem, owner of Clé, a bar and restaurant in Hamra.

Restaurant owners shared with Executive stories of the original states of their rented venues, many of which had no running water or electricity or were not even hooked up to the sewage system. They were met with challenges such as interior walls being too thick to be broken down without special tools or having to mix cement manually as the area was too tight for a mixer. All said they had to incorporate structural support to compensate for weak foundations. However, they all said they “fell in love” with the charm and history and could not envision their restaurants anywhere else.

But passion alone cannot guarantee the long-term preservation of commercially-used heritage houses. Since these sites are usually offered for lease and not sold, the owner can refuse to renew the lease agreement with the restaurant owner, or the restaurateur may choose to close down the venue if it is not performing well. “We can be happy that architectural heritage is safe for the time being but without property sale, no one knows what the future will bring,” says Sarkis. 

For the time being, there are two factors that speak to the long-term future of commercially-used heritage houses: investments in concepts where whole hospitality identities are built around the inclusion of heritage, and the passion of the operators.

Some venues, such as Noa or Sud, only preserved the façades of their buildings while constructing completely new interiors in line with their concepts. Other restaurants, such as The Gathering, Clé or Enab preserved as much of the interior as possible. “We kept the original tiles, the wooden beams on the roof, the window sills and even the lime wall interior,” says Tamara Zeidan, co-owner of The Gathering.

These varied efforts and different concepts have been rewarded, operators say, by steady streams of customers who seek out heritage in hospitality venues. To safeguard these venues even better, the public sector could contribute a great deal through indirect measures, such as allowing trade-offs on exploitation ratios, and direct measures, such as strict heritage protection of buildings and even neighborhoods. Until that day of administrative awakening, however, Beirut’s heritage will remain only under the protection of a lease.

“There is indeed a rise in interest in such projects and in going back to heritage and simplicity, though some investors still look for the easy way of building. We can all build new venues and have the same concept but then what makes me different?” asks Michel Yazbeck, owner of Sud.

July 24, 2013 0 comments
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The Buzz

Business briefing: 24 July 2013

by Executive Staff July 24, 2013
written by Executive Staff

Economics and Policy

Plans by Gulf countries to crack down on Hezbollah may pose a bigger threat to Lebanon’s fragile public finances than to the party itself.

More from Bloomberg

 

Turkey’s central bank has raised interest rates and said it would, if necessary, take further steps to stop the lira from falling.

More from Reuters

 

Consumer debt in the UAE has reached $95,000 per household, or $114bn in total, according to new research.

More from Arabian Business

 

Syria's opposition coalition has again said it does not have enough sophisticated weapons to turn the tide against forces loyal to President Bashar al-Assad.

More from Reuters

 

 
Companies and Business
 
National Bank of Abu Dhabi, the UAE's largest lender, reported a sharp rise in profits yesterday as the lender posted its first results under its new chief executive.

 
More from The National

 

July 24, 2013 0 comments
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Economics & Policy

‘I can’t see Lebanon getting one percent growth’

by Zak Brophy July 23, 2013
written by Zak Brophy

The trade sector is a fragile creature, susceptible to the vagaries of the market and those fickle human sentiments of confidence and trust. So it is little surprise that it has endured a bit of a tossing in the wake of the political crises and economic malaise besetting the country. Executive met with Chairman of the Beirut Traders Association Nicolas Chammas to hear how he and his colleagues are weathering the turmoil.
 

You have just received figures for the sector’s performance over the first quarter of 2013. How are they?

They show a clear downward trend in retail sales. The figures include more than 40 sub-sectors in Beirut and we have noticed for three quarters in a row a decline in retail activity. Internally we can point to the political cleavages and bickering and the security issues we face every single day and the absence of the government, which resigned late in the first quarter. This is not to even speak of the absence of the Arab tourists in Lebanon.

Is this trend a reflection of an actual contraction of economic activity or rather a reflection of low confidence and uncertainty over what the future holds?

Actually there are both. There is the wait-and-see attitude from the low confidence in the market, which is confirmed by the consumer confidence index. On the other hand, there is the lack of demand from the absence of the Arab tourists. In some commercial sectors that are related to consumer spending such as jewelry, clothing, fragrances, leather goods and so on, the contribution of tourists and especially Arab tourists is around 45 percent of duty free purchases. When these people are absent, we get hammered. The decline in the retail sector over the first quarter compared to the same period last year is 14.4 percent in real terms, which is huge especially when you consider that commercial activity accounts for around one third of the Lebanese economy. This talk of growth of 1 or 2 percent in the economy, I really don’t see it when we talk about the real economy. I can predict that if things continue going as we see them now, we will see negative growth this year.

Are there certain areas where the influx of Syrians, especially from the middle and upper classes, have buttressed retail activity?

They did boost retail, but in very limited sectors, essentially living essentials. But this did not compensate at all for the loss we have suffered elsewhere. The purchasing power of a migrant coming from a war zone is not a fraction of what it is with a tourist coming from the Arab countries. Even middle class families that come with some savings, they are very frugal with the ways they spend, perhaps over fears of worse days to come later on.  

There is an excess in supply of retail space in the current market. Has this translated into a fall in the cost of leasing retail property?

No, unfortunately not, as many of the leases have been contracted from more than one, two or three years ago. We are stuck with these rates and this is becoming a very big problem for retailers as we have turnover coming down and other operational expenses going up and leases representing a bigger and bigger proportion of turnover. Unfortunately, the owners of malls and large shopping centers are not very flexible with us, even though there is some excess capacity.

What about new leases for businesses who are entering the market, relocating or expanding?

If there is any downward flexibility it is really very marginal, even though we have seen such deterioration in our work environment over this past period. It is becoming a big problem and it is likely more and more people will have to evacuate their rental places in light of these problems. We are facing a liquidity crunch in all of the commercial sectors, from mild to severe.  In the best cases you have to pay your bills immediately and your receivables take a long time to come in so you have a mismatch in your payments and receivables. In the worst conditions we are suffering huge losses in terms of solvency. You know we have problems of liquidity arriving to solvency problems so you have structural deficits and we are witnessing more and more of this all the way to bankruptcies.

Minimum wage legislation was adopted about a year ago. Have you been able to pass on much of this increase in costs to the consumer?

We have not been able to pass on much of the wage increases as we simply don’t have any pricing power. The purchasing power of the population is so brittle you can’t increase prices. In fact we are seeing the opposite with retailers offering discounts at the height of the season just to clear inventory so as to be able to pay their bills and suppliers.

We are witnessing an increased clustering into new malls. What kind of pressure is that putting on retailers in traditional and dispersed locations?

This is absolutely the case and their business pool is shrinking. This is not unique to Lebanon but is happening everywhere and is now catching up in Lebanon. However, as it comes amidst a quasi-recession in Lebanon, it is a double whammy for the traditional markets. On one hand they are suffering a lack of business that is plaguing the entire nation and at the same time more business is being taken by the malls.

We think these two channels have to live side by side. We don’t at all want the end of the traditional traders as they are integral to the social texture of Beirut and Lebanon, but of course they need to modernize themselves and as such the financing from the banks needs to be there. The subsidized loans have benefited industry, tourism, housing, agriculture and so on but not the trade sector. There is a prevalent misconception that trade is mostly light assets, which is not the case. If you look at our balance sheets we have lots of fixed assets and there we would benefit from subsidized loans. Traditional retailers need some money to modernize themselves, just like we have seen in the restaurant sector in recent years.

Why have you recently released a branded card for the Beirut Traders Association (BTA)?

This is to help more of the traditional and smaller retailers. It will increase the loyalty between them and their customers. It will be a win-win situation with discounts and benefits for the customers as well as increased financial proceeds for the retailers.  Most importantly, we are hoping this will stimulate much needed demand in the market, to somewhat offset the drop in external demand from tourists and expatriates and to tap into forgotten corners of the internal market. Since smaller retailers cannot bargain for good conditions vis-à-vis the banks it was important to have this co-branding between the BTA and Blom Bank so that all participants operate under the umbrella of the BTA.

July 23, 2013 0 comments
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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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