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Economics & PolicyLebanese in New York

Rony Zeidan

by Maya Sioufi April 11, 2013
written by Maya Sioufi

Based in San Francisco working as an art director at eluxury.com — the e-commerce site of French luxury goods giant Louis Vuitton Moët Hennessy — flying out to New York every couple of months for photoshoots, staying at the Soho Grand Hotel, earning a decent salary: Rony Zeidan had it good. But in 2002, he left it all behind, moved to the Big Apple and crashed on a friend’s couch.

“Everyone thought I was insane because I had a great job, but the company was going down a more commercial and less creative direction and it wasn’t my vision,” says 35-year-old Zeidan as we sit in the offices of his four-year-old company, RO New York, a boutique modern luxury design and advertising agency. Eluxury.com eventually closed down in mid-2009.

As a child in Lebanon attending Saint Joseph School in Cornet Chahwan, Zeidan wanted to become a fashion designer, drawing sketches to show his uncle who had an atelier in Beirut. As he eventually decided to study a broader spectrum of design, he moved to California and graduated from San Jose State University with a graphic design and photography degree — entirely self-funded through different jobs from working as a file clerk at a technology company to working at a fried chicken restaurant.

With a passion for fashion, Zeidan was naturally drawn to New York, the trend- setting capital. With an internship and some freelance experience at Donna Karen, Zeidan’s first full time job in the capital of fashionistas was as art director at Ralph Lauren, “not my favorite brand at the time, as what I liked was Balenciaga,” he says.

Three years after moving on from Ralph Lauren to join advertising agency Kraftworks, Zeidan’s not-so-favorite brand was back to push him up the career ladder again. This time as global creative director for Ralph Lauren fragrances at French cosmetics and beauty company L’Oréal. The odd thing is Zeidan does not even wear a fragrance, though that ended up being a turn in his favor. “I walked into the interview, they asked me what fragrance I wear and I said, ‘I don’t wear a fragrance, I never designed a fragrance model nor packaging for fragrance’, to which the answer was ‘this is exactly what we are looking for, someone who can come in with a fresh point of view,’” says Zeidan, who went on from there to manage the launch of six fragrances.

In 2009, in the midst of the economic meltdown, his career path took a sharp turn. As L’Oréal attempted to save costs, Zeidan was asked to consider getting rid of the entire creative team, outsourcing the work and becoming creative director. “I said, ‘I’m not interested in being a traffic manager; I’m ready to open up an agency. Give me part of the work and I will take a few of the employees that you want to lay off’,” he recalls. Lengthy negotiations ensued and RO New York was eventually set up with the help of his sister Dina and with a first contract from Ralph Lauren — probably his favorite brand by then.

For his new agency, Zeidan opted to offer several services at lower prices as opposed to specializing in a particular aspect of design — a less attractive offering during the economic crisis. His approach proved profitable as RO generated $700,000 in revenues in its first year of operation. After dropping up to 15 percent in the next two years, revenues were up again in 2012 (though he did not disclose absolute figures). For this year, Zeidan hopes that revenues will reach $1.2 million and ultimately $3 million within five years.

His 10-member team caters to clients from different regions in the world including New York’s Calvin Klein, Switzerland’s Chopard, Austria’s Swarovski and Lebanon’s fashion designers Georges Hobeika and Joseph Abboud.

Returning to Lebanon is not on his foreseeable agenda, but Zeidan said he would love to have more opportunities to provide Lebanese companies with an international perspective. He hopes to corner new markets, mainly hospitality, with two New York restaurants already on his roster. A Lebanese gourmet café “Man’oucherie”, founded by Sara Trad, will be opening in the Chelsea district by the end of the year and features in his upcoming projects.

“That’s very exciting to me because it goes back to my heritage with a cool New York vibe to it,” says Zeidan. As our meeting comes to an end, I am left wondering how much Beirut’s own vibe is missing out with such Lebanese talents abroad.

April 11, 2013 0 comments
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The Buzz

Morning briefing: 11 Apr 2013

by Executive Staff April 11, 2013
written by Executive Staff

Economics and Policy

Gold fell to its weakest level in nearly a week on Thursday as strong shares boosted demand for riskier assets.

More from Reuters

 

Qatar's prime minister has announced $3 billion (Dh11.02bn) in aid to Egypt, reducing pressure on Cairo to finalise a $4.8bn loan from the International Monetary Fund that would require cuts in subsidies.

More from The National

 

Lebanon is planning to raise $1 billion through an increase of its outstanding 2023 and 2027 Eurobonds.

More from The Daily Star

 

The number of departing and arriving passengers at Beirut’s Rafik Hariri International Airport rose by 17 percent in March and 11 percent in the first quarter of this year, according to the Civil Aviation Authority.

More from The Daily Star

 

Companies and Business

The chief financial officer of Abu Dhabi conglomerate Al Jaber Group, which is in the midst of a $4.5 billion debt restructuring, has resigned.

More from Reuters

 

Dubai International Airport will have overtaken London Heathrow as the world's busiest international airport by 2015, according to the man who runs British Airways and Iberia.

More from The National

 

Mashreq, Dubai’s second largest bank, has filed a US lawsuit accusing Netherlands-based ING Groep NV of losing 40 per cent of a $108 million investment by improperly putting the money in risky debt.

More from Reuters

 

Telecom operator Zain’s Bahraini unit has received government approval to launch a long-awaited initial public offering (IPO), the company said on Wednesday.

More from Reuters

April 11, 2013 0 comments
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Economics & Policy

Lifting the lid on extraction

by Joe Dyke April 11, 2013
written by Joe Dyke

Oil and gas industries in the Middle East are among the least transparent in the world. According to the pro-transparency group Revenue Watch, Saudi Arabia, Kuwait and Algeria fall into the lowest category of “scant transparency” — meaning they publish almost no information about where their billions of dollars in oil revenues go — while Yemen, Iraq and Iran are in the slightly better “partial transparency” category.

So when the European Union backed a deal on Tuesday demanding that all payments to governments over 100,000 euros ($130,000) by EU companies be made public, it may not have been well received in Riyadh or Algiers. Under the law, firms must report payments per project as well as on a country level. Major energy firms had pressed for exemptions, but none were granted.

The legislation follows the passing of the 2010 Dodd-Frank law in the US that set similar requirements for American companies, but crucially the EU law also requires companies that are not listed on stock exchanges to declare their payments.

It is expected to be confirmed in the coming months, with Ireland — current holder of the rotating EU presidency — saying it aims to push through the agreement before the end of its presidency in June.

Johnny West, founder of the OpenOil campaign that demands transparency in the extractive industries, told Executive that he expected the legislation to “yield fundamental shifts in the way business is done in the oil and gas industries."

"The EU has confirmed by this decision that there is a new norm emerging now in international business of a system-wide transparency. By confirming the same broad lines as the US Dodd-Frank legislation — project level reporting, no exceptions, all payments over $130,000 — the EU has created another major point of triangulation in analyzing the business of the extractive industries worldwide,” he explained.

Closer to home

For the Middle East, this means that the majority of oil and gas payments may now face some degree of public. Revenue Watch estimate that companies registered on EU and US stock exchanges represent 85 percent of the global value of companies in the oil and gas industries.

More on this topic: Transparency is not enough

A positive start for Lebanon's Petroleum Administration

Carole Nakhle, an energy economist specializing in international petroleum contractual arrangements, said the publication of payments that affect the Middle East could force governments to be more transparent, while tax avoidance could also be tracked. “The disclosure of such hitherto confidential information risks creating something of a feeding frenzy for NGOs and academics that will wish to enquire further,” she said. “With such detailed disclosure at the project level, governments will find it easier to benchmark their tax regimes against others with comparable characteristics. Companies will face greater scrutiny and pressure to explain tax discrepancies or variances.”

In Lebanon, which is beginning the process of awarding contracts for its newly-discovered offshore oil and gas, the ruling is likely to have a significant effect. Of the 52 companies that applied for pre-qualification for the right to bid on the country’s offshore resources, 17 are from the EU, with another six from the United States.

More crucially, eight of the 14 companies that have applied to be operators — meaning they are primarily responsible for organizing production and absorbing costs in the three-company consortium bids — are either from the EU or the US. If these firms are awarded contracts, they will be obliged to reveal payments.

Diana Kaissy, the Middle East and North Africa Coordinator for the Publish What You Pay lobbying organization, told Executive civil society and NGOs could then use the information to identify and prevent corruption in Lebanon's extractive industries.

“They can use the information to push the government to reveal actual revenues they received and start comparing numbers. With simple analysis you can discover if there has been any money disappearing into pockets or anything else illegal,” she said.

“It is going to be a great tool in the hands of civil society organizations. Even if the numbers match then civil society will have the amounts to put on the table to demand to know where it has been invested.”

April 11, 2013 0 comments
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Economics & PolicyLebanese in New York

Capelli

by Maya Sioufi April 10, 2013
written by Maya Sioufi

Ranked the number one football club in New Jersey for boys under 12, George Altirs’ Cedar Stars Academy is “almost his full time job now” he jokes. Established in 2011, the club currently trains up to 125 children between the ages of three and 12, including Altirs’ own boys. It was not the ball that carried Altirs up the ranks of success though. It was hair — or capelli in Italian.

Altirs is the founder and chief executive of Capelli New York, a privately held company which designs, manufactures and markets private-label and branded products in the accessories, apparel and footwear industry for women, teens and kids. 

We meet in the company’s headquarters in Midtown, during the busy market week when buyers visit to view the upcoming winter collection and Altirs asks me where my hair clip is from. “Claire’s,” I answer, and then he asks me where my scarf is from. “Accessorize,” I reply, and then he concludes, “so both are from Capelli”.  With a wholesale distribution network expanding beyond the United States to Europe and Asia, the company’s clients include Wal-Mart, the largest retailer in the world, as well as large department stores such as New York’s Macy’s, Paris’ Galeries Lafayette and Britain’s Marks and Spencer, in addition to 31 retail stores in the US. 

 

The story behind Capelli begins in the town of Mijlaya in the Zgharta district of Lebanon, where the Altirs family is from. After attending College Mont La Salle and earning an engineering degree from Ecole Polytechnique Supérieure d’Informatique Liban (EPSIL) in Kaslik, Altirs moved to New York in 1988.  Shortly after arriving in the big apple, he and his brother opened a hair accessories company. “I saw an opportunity and thought we could do better than what people [were] doing, so we started,” he says. With a factory in Brooklyn, Capelli sold to wholesalers and retailers in the US. The product offerings expanded to include everything from hats and scarves to hosiery, footwear, apparel — and of course sportswear for the Cedar Stars Academy.

Capelli even has three franchise stores in Lebanon: one in Ehden, one in Zgharta and one in City Mall on the Dora highway. “It is nice for people in Lebanon to know what we do,” he says. Besides Lebanon, the Middle East remains untapped, though, as Altirs’ focus is on faster-growing emerging markets, mainly China. “We are well established in China; it is big enough for us so we see no need to go somewhere else,” he adds.  With revenues of $200 million last year, production is undertaken in three factories in China, where 1,700 of Capelli’s 3,000 employees are based. With a total floor space of 140 thousand square meters, the factories have an annual total capacity for 42 million pieces and 16 million pairs of shoes — that’s four pairs of shoes per person in Lebanon. 

Entirely owned by the two brothers, Altirs never considered a complete or even partial sale of the company, whether to a private equity group or on the public market. “I have a vision, I don’t want to sell,” he says,  adding that he has the necessary capital to finance future growth. 

As for his main challenge, it’s “a constant race; everything is transparent now and retailers are buying from the Chinese, the Indians, etcetera. When Wal-Mart bids, we have competition from everyone in the world.”  

In 2009, at the height of the financial crisis, retail sales in the US dropped by more than 6 percent, the largest drop on record since 1992, and some retailers did not make it. “The pie became smaller, it’s a lot more competitive,” says Altirs, but with products on offer anywhere from $1 to $30, Capelli’s sales are somewhat “recession proof”. That’s not to say that it made it unscathed; volumes dropped 30 percent during the recession, compelling the company to lay off 30 percent of its workforce. Retail sales in the US have picked up since, growing 5 percent in 2012 after 8 percent growth in 2011, and the National Retail Federation is expecting further growth this year, albeit at a subdued 3.4 percent. “Now we are ok. We are doing well,” says Altirs.

As we wrap up our meeting, he gives a word of advice for Lebanese back home looking to kick off their careers: “Be patient; being rich quick also means it goes quick. Establish your reputation first, let people trust you.” He then goes back to the busy showroom to join his workforce in doing what he does best — enticing more customers to Capelli’s budget-friendly and trendy items — while looking forward to taking his boys on a football trip once market week comes to an end. 

April 10, 2013 1 comment
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The Buzz

Morning briefing: 10 Apr 2013

by Executive Staff April 10, 2013
written by Executive Staff

Economics and Policy

Lebanon’s GDP is expected to grow at 1.4 percent in 2013 in the face of mostly poor economic indicators, global bank HSBC has said, downgrading their previous estimate of 2 percent.

More from The Daily Star

 

Dubai’s measure hit a 40-month high on Tuesday as investors betting on upbeat first-quarter earnings extended a buying spree, while Saudi Arabia’s bourse also rose, breaking strong technical resistance.

More from Reuters

 

Egypt’s prime minister Mohammed Morsi is due in Qatar for talks with his country’s biggest Gulf Arab financial backer as Cairo is negotiating for an IMF loan to help ease a deepening economic crisis.

More from Reuters

 

Lebanese consumer confidence dropped to a near record low in the second half of 2012, according to a new report.

More from The Daily Star

 

Companies and Strategies

Electricite du Liban workers will stage sit-ins and suspend work on April 10 and 11 to protest the annulment of basic articles in the company’s new budget.

More from The Daily Star

 

Saudi Hollandi Bank and Saudi British Bank (SABB) beat estimates for first-quarter net profit, with both lenders attributing the growth in earnings to higher operating income.

More from Reuters

 

Doha Bank, Qatar’s fifth-largest lender by market value, plans to nearly double its profits from international operations by 2015, mirroring a strategy employed by other Gulf Arab lenders facing intense competition at home.

More from Reuters

 

Sharjah Islamic Bank (SIB) has sold a $500 million five-year Islamic bond at tighter pricing than initially indicated due to strong demand for sharia-compliant debt from the Gulf Arab region.

More from Reuters

 

Etihad Airways’ president and CEO James Hogan has said it is “very clear” the airline cannot catch regional giant Emirates.

More from Gulf Business

April 10, 2013 0 comments
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Society

Beirut City Centre mall – a work in progress

by Nabila Rahhal April 10, 2013
written by Nabila Rahhal

The much-anticipated Beirut City Centre (BCC) mall finally opened its doors last week and thousands of Lebanese have already flocked to Hazmieh, causing chaos on the already congested roads leading to the venue.

Boasting forty new brands or “firsts in the country”, there is certainly a lot to get excited about but, as the initial hype dies down, one wonders if the mall has what it takes to keep customers coming back.

The mall, in the Hazmieh area of Beirut, is impressive in size but perhaps not in architecture

From the outside, BCC is rather basic, especially compared to some rivals that have invested heavily in their exterior appearance. But the 65,000 square meter interior is well organized despite its size, divided into three floors with strategically placed escalators that give it a manageable and structured feel.

The shopping experience, however, currently feels like a work in progress as many of the 200 outlets, including VOX cinemas and several core retail brands — Victoria’s Secret, Marks and Spencer, and Pottery Barn — have not opened their doors yet.

The branch of Carrefour is the first in Lebanon

So far the main reason people have been filling the halls of the Beirut’s newest mall is the opening of Carrefour, a 12,857 sqm hypermarket spread over three floors. The luring of the second-largest retail chain globally is quite a coup for BCC and many shoppers Executive spoke to said that they were coming mainly for Carrefour and would possibly visit other shops along the way.

Carrefour claims to have the lowest cost items of any supermarkets in the country. Customers who have tested these claims generally agree that it provides worthwhile promotions, especially in household items, but say that food is generally around the same price as elsewhere – especially with all the supermarkets dropping their prices to beat competition. Walking through Carrefour, one is dazed by its sheer size, but if you enjoy large, well-organized supermarkets where you can hunt for daily bargains, then the French-owned brand is ideal.

This child was less impressed than his parents

Another popular venue at BCC is Magic Planet, a huge space dedicated to children’s entertainment that has proved popular in Dubai. This 1,337 sqm version is packed with the latest in arcades and carnival-like games, and the space is buzzing with children whose parents are all too happy to buy their children the pretend debit card at the door (a more modern version of arcade coins) and leave them to rush off and max out their own cards.

Also imported from Dubai is the concept of the food court, located on the third floor of the mall. Restaurants in Lebanese malls tend to have separate seating areas and so the idea of a common dining area is new to the country, though it seems to be popular. Employees in the area around BCC were especially happy with the wider variety of quick meal options they now have during their lunch breaks, ranging from Kababji to KFC. The more specific food and beverage outlets options, which include Cheesecake Factory and Shake Shack, are not in operation yet.

The communal food court, so popular in Gulf malls, has arrived in Lebanon

Retail wise, BCC houses many brands not found in the local area — including Springfield, Express and American Eagle Outfitters — and is also introducing new brands to the country, two points which are bound to make it a top spot for fashionistas in the area. Both the brand mix and the facilities that BCC is providing seem to be catering towards families with a middle-level income.

A visit to Beirut City Centre leaves one with a sense of expectation for what will be when all the stores are fully in operation; once the Carrefour dust has settled down, it remains to be seen if the other key attractions and new brands to the country will be enough to keep the city center on its feet for the years to come.

April 10, 2013 0 comments
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Comment

Syria can’t afford to break apart

by Jihad Yazigi April 10, 2013
written by Jihad Yazigi

As violence expands across Syria, fears over the future of the country are increasing. They range from the potential use of chemical weapons in the conflict to the unleashing of a full-fledged sectarian war and to the potential disintegration and partition of the country along sectarian and ethnic lines.

Regarding the latter risk, it is likely that economic factors will play an important role in terms of its impact on the centralization/decentralization debate and on how any future partition of the country could affect economic policies.

See also: Could a Syrian Kurdistan work?

Trade between Iran and Syria increasing

The issue that comes first to the mind is obviously the north-eastern part of Syria, inhabited to a large extent by a Kurdish population. While prior to the conflict the demands of the Kurds were mainly limited to linguistic and cultural rights, there are now increasing calls for the creation of an autonomous region. The issue is particularly sensitive because Syria’s northeastern region is home to the country’s largest reserves of crude oil.

Indeed, while fields located near Deir Ez Zor, where the population is overwhelmingly Arab, generated most of Syria’s crude output in the 1990s, their production has now fallen from more than 400,000 barrels per day (b/d) in 1996 to around 100,000 b/d in early 2011. The fields around Hassakeh, near the Kurdish region, now extract more than 250,000 b/d of crude and hold most of the country’s reserves; these fields are now to a large extent under the control of the Kurdish Democratic Union Party.

Besides oil, however, the northeast is also host to most of Syria’s wheat and cotton crops. Because bread is Syria’s main staple food and cotton is key to the development of the large textile industry, keeping control of the region will be of utmost importance for any future Syrian central government.

The fears over a Kurdish region with wide autonomous powers may be exaggerated in view of the relatively small size of the population, the lack of a major urban centre — Qamishli, the largest city in the Kurdish region, is home to only around 200,000 people — and the fact that Kurds are actually spread across the country; the largest concentration of Kurds is in Aleppo, which has a majority Arab population. Still, the debate on how to share the resources of the state between the central government and the various provinces making up the country will be of particular importance when it comes to the Kurdish-dominated parts of Syria.

Another region of Syria that matters in the debate over decentralization or partition is the coastal area, where a large portion of the population is Alawite. While the issue of a potential independent Alawite state was raised during the French mandate, it has largely died out since and was reignited only in the last few months with the growing sectarian tones of the conflict gripping the country. Besides the fact that Sunnis and Christians probably represent up to 50 percent of the population of that region, the economic challenges that such a region would face would be numerous.

Syria’s coastal region has very limited manufacturing and agricultural basis. Except for a refinery in Banias, a single power plant and an old cement plant, manufacturing is limited to light industries and agriculture to tobacco and citrus fruits.

Some argue that Lebanon has managed to remain independent with as little resources. However, Syria’s coastal region has none of Lebanon’s large expatriate community, significant human resource wealth and excellent know-how in the financial, touristic, education and health sectors.

The debate over the sharing of the resources of the central government goes, however, beyond the sectarian/ethnic issue. Syria’s small cities, spread across most of the country, such as Rastan, Talbisah and Tel Kalakh, have paid an extremely heavy price in the uprising and are likely to demand a much larger share of the government’s money and investment programs than other less affected regions — including parts of the country inhabited by minority groups, such as Suweida or the Christian city of Mhardeh.

What will the policy of any future government be on these issues and what impact will it have on issues such as development programs or political representation? With more time passing, the challenges for future Syrian governments are increasing. It is time the opposition starts thinking about them.

April 10, 2013 0 comments
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Economics & PolicyLebanese in New York

The Lebanese Rocket Society

by Nabila Rahhal April 9, 2013
written by Nabila Rahhal

Ever heard of Lebanon’s bid to join the space race? You would have had you the chance to wander into New York’s CRG Gallery in Manhattan this spring. The multi-layered exhibit entitled “The Lebanese Rocket Society: A Tribute to Dreamers” includes works in the mediums of video, photography, sound and sculpture, and explores, as the gallery notes, a “forgotten space of adventure” in Lebanon.

With the Americans and Soviets in a race to the moon in the 1960s, Lebanon began its own quest into space study and exploration, becoming the first country in the Arab world to develop its own solid fuel “Cedar Rockets”. It launched 10 in total between 1960 and 1967.

The Rocket Society was lead by math professor Manoug Manougian and his students from Haigazian University and was widely popular, receiving broad media coverage, its own official stamp and financial aid from then-President Foaud Chehab. And then, at the pinnacle of its success, the project was abandoned. Possibly as a result of tensions in the build up to the Civil War that followed shortly after, the Lebanese Rocket Society was dropped and effectively forgotten — until Joana Hadjithomas and Khalil Joreige, two Lebanese visual artists and film directors, brought it back to life through their project.

The exhibit made its debut at the Beirut Exhibit Center in the Lebanese capital last year, under the title of “How Soon is Now? A Tribute to Dreamers”. It was the artists’ intention that the project be launched in Beirut, as it was important to them that the city where the project was born be the first to see it relived. They were not disappointed with the exhibit’s reception in Beirut, noting that it raised awareness about a period in history that many people did not know existed.

Though the installations that make up the exhibit have been displayed in many art houses across the world, including Dubai, Paris and Lyon, the exhibition in its entirety has only been displayed in Beirut last year and now in New York.

Hadjithomas and Joreige worked for several years with Carla Chammas — the C in the CRG Gallery, a Lebanese who has lived in New York for more than 25 years. Chammas wanted to have all the parts of the exhibit in New York, including “The President’s Album”, an installation of 32 folded images that make up a rocket, produced by Chammas herself to showcase in New York.

Of the New York interest in the exhibit, Hadjithomas says: “We, as Lebanese, are of course interested in the project, but to make it interesting to other nationalities was really a challenge — one which we conquered.” According to Hadjithomas, the New York crowd was attracted to the exhibit because, in addition to the visual artistry of the exhibit, they were also exposed to forgotten research on a historical period when Pan-Arabism was at its height in the region and the space race was at its peak internationally.

The other part of the project, the documentary entitled “The Lebanese Rocket Society, the Strange Tale of the Lebanese Space Race” will be released in Lebanon on April 11, and Manougian himself will be attending the premiere after an absence of 47 years from the region.

The film is a tribute to dreamers, and the directors insist the film’s message is not one of nostalgia or a lament for past glory. “We see it more as an incredible adventure, a conquest, which makes a great story,” explains Hadjithomas. “It is also a story that has been forgotten, and we deal with that in the film. We also want to continue this gesture of dreamers in the present and recall it, to say that today we can do something, we can be those dreamers again.”

April 9, 2013 0 comments
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Economics & PolicyLebanese in New York

Ilili

by Maya Sioufi April 9, 2013
written by Maya Sioufi

“Justice prevails in the end whether here or in the afterlife,” says Philippe Massoud, recalling the assassination of his father George in 1986, during the Lebanese civil war. Over coffee with his older brother Alex at Ilili, their upscale and trendy Lebanese contemporary restaurant in the Flatiron neighborhood in Manhattan, Philippe goes over his turbulent life path from an upbringing at the Coral Beach Hotel during the war to becoming a top-line New York restaurateur.

“They were trying to segregate Beirut between Christians and Muslims; we were a Christian family living on the Muslim side,” says Philippe, as he explains why he spent most of his childhood in the kitchen of the Coral Beach Hotel, built in 1964 by his father and family. By the age of eight, Philippe was already making culinary comments to the chefs on what ingredients were missing in a meal. His father never wanted him nor Alex to venture into the hospitality business, as his own experience running the hotel in war-ravaged Lebanon was not a profitable one.

Ilili serves traditionally Lebanese dishes with a contemporary twist

 

Alex listened to his father’s advice — at least initially. He pursued his studies in engineering in Colorado and kicked off his career in Silicon Valley. Coral Beach was no longer a Massoud asset then, so “my father was clairvoyant for me,” says Alex as he did not have the option of returning to the family business when he graduated. Two years after their father’s assassination, the Coral Beach hotel was sold at gunpoint at a distressed price of $5.5 million, “a pretty serious mistake considering that in 1983, we had an offer for $33 million” says Philippe. But the Massoud family, worried about the security of their deceased relative’s wife, decided it was best to sell the hotel. “Our mother was getting threats, and they wanted her to leave West Beirut,” adds Alex.

Philippe, the more rebellious brother, was not as obedient as Alex to his father’s advice, pursuing his studies in hospitality at Cornell University and graduating from the Rochester Institute of Technology in New York. From a young age, Philippe was determined to launch his own restaurant, even trying to acquire Mediterranean restaurant Aladdin at the age of 17.
 

The exotic starters have proved a hit in Manhattan

 

On the menu

“[Because of] the fact that we had an abrupt end to Coral I had a fixation that we needed to do something in hospitality,” says Alex, and in 1994, the two brothers reunited. After several failed attempts — where they tried to acquire the Time Out Space from the Tabet family in Beirut and launch a “hip lounge à la Hotel Costes in Paris” — and in New York — where they attempted to open a fast food concept — they decided to drop their entrepreneurial dreams for the time being and split again.

Alex joined the finance industry working as a portfolio manager. Philippe joined the hospitality industry managing multi-concept restaurants in New York, until Lebanese restaurateur Bechara Nammour contacted him in 1999 to launch a Lebanese restaurant in Washington, DC. And that’s how Neyla, with a “high see-and-be-seen factor” according to the Washington Post, came into the fine dining restaurant scene in Georgetown. “It was matter of life and death for me for Neyla to succeed,” he says.

After Philippe fell out with Nammour in 2004, he took a one-year sabbatical during which his dream of launching his own restaurant was reignited. “Our friend George Bitar put fire under my feet,” says Philippe. “He said, ‘We are tired of eating bad Lebanese food in NY, why don’t you open here and we will help you raise the funds?’” And so Philippe and Alex reunited again. In November 2007 their efforts finally came to fruition with the opening of Ilili (meaning “tell me” in Arabic).


The restaurant has 120 employees and plans to expand

With 31 Lebanese-American investors on board, Philippe and Alex, majority owners of Ilili, managed to secure the funds for their ambitious project. Refusing to disclose the exact cost, they only state that if it weren’t for the “inherent savings from aggressive bidding and value engineering”, Ilili would have cost them $6 million to $6.75 million.

The timing of the opening was not ideal, with the US financial meltdown, constraining purchasing power on everything from cars to clothing to restaurants — hommos, tabbouleh and shawarma included. But “people were still coming because it was a new restaurant and a new concept,” says Alex and the restaurant generated $4 million in revenues in its first year of operation, at the height of the financial crisis. For this year, the brothers are expecting up to $9.5 million in revenues.

And a new concept it is. From lunches and dinners offering labneh with salmon roe, to veal in katayef, to duck shawarma in a pita wrap, to brunches offering chankleesh egg man’ouche or zaatar eggs benedict, Ilili’s concept mixes Lebanese traditional cuisine with a creative touch, all set in a lavish décor with up to 250 red seats in a large rectangular cedar wooden space. “We want to be the Nobu [a renowned upscale Japanese fusion restaurant] of the eastern Mediterranean cuisine encompassing all the countries of the Ottoman Empire with a strong focus on Lebanon and what it has to offer,” says Philippe. A Middle East twist also features on the cocktail menu. With a lounge area seating up to 40, cocktails with funky names such as “From Beirut with Passion” and “From Manhattan to Beirut” are on offer for clients to relish.

The Massoud brothers, Philippe and Alexander, have no plans to return to Lebanon

 

With 120 employees, the Massoud brothers want to take the establishment as far as it can go, with Philippe expecting to generate $30 million to $40 million in the next couple of years. Plans include launching another Ilili in downtown New York, reigniting their initial ambition of launching a fast food concept, going down the private equity route and opening up in London, pursuing Ilili catering, starting Ilili on airplanes; all options are on the table, and the brothers are scratching their heads to decide which is the best route to continue growing.

How about a return of the Massoud brothers to Lebanon? “Given what we have been through, Lebanon is in the freezer for now and the longer it sits in there, the harder it will be to take it out,” says Philippe, but if the opportunity came for him and his brother to run the Coral Beach Hotel, he says he would entertain the idea “under the right condition,” in order to continue their father’s legacy.

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The Buzz

Morning briefing: 9 April

by Executive Staff April 9, 2013
written by Executive Staff

Economics and Policy

 

Donor countries committed $3.6 billion to Sudan's Darfur region to be paid over six years during a donor conference on Monday hosted in Qatar aimed at helping it cope with an armed conflict that has killed thousands.

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The Beirut Stock Exchange rose for a second trading day on Monday as Solidere stocks gained on the appointment of Prime Minister Tammam Salam.

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A report handed to the Lebanese State Prosecutor Monday named 411 individuals who allegedly received illicit money from the now-defunct Al-Madina Bank.

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Companies and Business

Kuwait-based Burgan Bank is looking at potential acquisitions in Egypt to step up international expansion and is not put off by the country's uncertain political situation.

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The United Arab Emirates’ top telecom operator Etisalat has stopped blocking the website of Skype, the world’s No.1 internet-based phone call provider, although the move could put further pressure on the state-controlled firm’s revenue.

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Malaysian construction firm MMC Corp Bhd said the Saudi government had terminated the rights of its joint venture with Saudi Binladin Group to develop the $30 billion Jazan Economic City in Saudi Arabia.

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Changing trading patterns and pressure to improve profit margins will boost the Gulf's use of the Chinese yuan in coming years, the head of banking giant HSBC's China operations said on Monday.

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United Arab Emirates-based Islamic lender Ajman Bank has hired Mohammad Zaqout as its new chief executive following the resignation of its acting CEO.

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