The posh Boutique 1 is known for its multi-brand store located in the scintillating Jumeirah Emirates Towers mall. Its large space is decorated in sleek lines and neutral colors, boasting a flurry of brand names. Executive interviewed Ziad Matta, the CEO of Boutique 1’s mother company Sifico.
E The luxury fashion retail industry seems to really have grown in recent years…
The market has been really booming! Our sales have been increasing by about 40-50% a year in the last couple of years and men’s fashion is a segment that has been growing in line with the rest.
E What is your current structure?
Sifico Fashion owns and operates Boutique 1’s multi-brand stores as well as a series of mono-brand stores. We own a Boutique 1 store at Boulevard in the Jumeirah Emirates Towers in Dubai and we will be opening two additional stores during 2008, a second store at The Walk in the JBR (Jumeirah Beach Residence) in Dubai as of July 2008 as well as a store in Beirut later in the year. Our Boutique 1 store currently carries more than 200 brands. Our next store is built around a new concept including a spa, an art gallery, a furniture and home accessories area, a cafe, another area dedicated to books in addition to fashion, accessories and beauty that remain at the core of our activity. The company also owns and operates two Furla accessories stores in Dubai under franchise from the Italian company as well as a franchised Tabbah store, the famous Lebanese high-end jeweler. The company is also launching five more stores at the Dubai Mall in September, which consist of Chloe, Missoni, and Mulberry as well as additional stores for Furla and Tabbah.
E How much money are men spending on fashion and do you think it can be tied to the emergence of the culture of the metro-sexual man?
Although they exhibit different shopping behavior than women, men are certainly spending more money on fashion items including both casual and formal wear. Another noticeable trend is the increase in men’s spending on skincare and grooming products. More specifically, Middle Eastern men are very particular about their looks and overall appearance.
E How are luxury fashion brands further engaging their clients?
Many luxury fashion brands are expanding into new industries by offering a complete lifestyle experience. Hotels are one of such ventures. Two of the brand names we currently hold, Missoni and Elie Saab, have entered the hotel business by designing luxurious palaces in the Middle East, Missioni in Kuwait and Elie Saab in Dubai. Stores are thus no longer the only place where customers can experience luxury brands. This presents an opportunity for retailers and further increases the brands’ equity although it also exposes retailers to another business over which they have no control.
E How much support do you get from the luxury brands?
It varies from one brand to another. Most brands, with the exception of a few, are usually very supportive of retailers and are backed by the necessary infrastructure and resources.
E What are the current trends shaping the retail luxury fashion market?
Value added services such as personal stylists have become the norm and there is a growing emphasis on the actual shopping experience of customers, whereby stores have become comparable to theatres. This is in fact the DNA of our Boutique 1 store. We bring the highest standards of service to customers who expect nothing short of the best — this sets us apart from the rest of the retailers.
E Who are the most sought after brands?
All the brands we carry are highly coveted by customers. The brands that are performing extremely well are Elie Saab, Missoni and Chloe, among many others. This has prompted us to open mono-brand stores for Missoni and Chloe in the Dubai Mall and we are also considering a joint venture with Elie Saab for a mono-brand store in Dubai.
E Are there any newcomers? Who are the most popular?
We actually add about 20 brands every season to our collections. For the Autumn Winter 08/09 seasons we are particularly excited about bringing new names such as Halston and Ossie Clark onto the market. Both designers were extremely popular in the 70s and are now making a great comeback.
E Who are your clients and what type of experience are they looking for?
Our clients are an extremely diverse set of people. They are a combination of UAE residents as well as tourists. Among the UAE residents are Emiratis, followed by Arab and European expatriates. Tourists consist of two main groups, which are mainly GCC Nationals and Russians. Irrespective of their nationality and country of residence, our customers are seeking the best brands and the latest fashion must-have items, a personalized service and a fun and inspiring in-store experience.
E How much do they spend on average?
Clients mostly spend on prêt-à-porter items such as denim and casual and evening gowns, shoes, bags, and beachwear as well as beauty products. Customers are increasingly willing to spend more on brands that are not necessarily well-known, if they buy them in stores they trust such as ours as they feel they can rely on our buyers’ know-how. In such a context the quality of the product constitutes a key element and when customers fall in love with certain pieces, price and the notoriety of the brand are not an issue anymore.
E What are type of products on which brands rely to float their sales?
Most brands are delving into new lines of products. Brands that historically focused on prêt-à-porter items are adding bags and shoes to their collections while other companies, whose core activity is built around leather goods, are designing prêt-à-porter collections. Many brands have created their own fragrance while others have developed complete beauty lines. Many brands are seeking to provide customers with an all-encompassing experience. As mentioned earlier, hotel projects designed by Missoni in Edinburgh and Kuwait and by Elie Saab in Dubai in collaboration with Dubai Holding’s Tatweer are reflective of such trends.
E Are prices of luxury products increasing?
Prices have definitely been increasing which can essentially be attributed to higher exchange rates of the euro to the dollar.
E How does the current world recession affect your sales in term of tourists spending?
Luxury fashion is relatively immune to the economic situation and our customers’ spending does not seem to be affected.
E But what about the oil riches witnessed in the region? Has this affected the spending of locals?
The oil price factor is certainly of more relevance to us retailers. The high oil prices work to our advantage, since our main customer base is comprised essentially of GCC Nationals and Russians who are benefiting from the oil boom.
E Are more luxury brands customizing products for the Arab consumer?
Boutique 1 is working closely with designers, such as Temperely, Luella, Me & Ro, and producing exclusive pieces including evening wear, leather goods, and accessories. In addition, many brands are happy to adapt some of their designs to suit our customer requirements especially when it comes to dress or sleeve length.
