Making Casualwear a Winner in the Middle EastOften overlooked by international retailers, the Middle East region is proving to be fertile ground offering a mix of tourism and a stable local consumer population.
One of the front runners in the Middle East retail race is Hong Kong-based casualwear retailer Giordano.
The move was the brain child of Ishwar Chugani. Working in Dubai with the ETA-Sascon-Star Group, a conglomerate which has interests in a wide range of industries, Chugani suggested that the company venture into retail. Familiar with the Giordano brand from his days as a business management student in the Philippines, he felt that the classic casualwear would appeal to Middle Easterners who were beginning to reach out to Western apparel. In 1993 Giordano International Ltd and Emirates Trading Agency (ETA) established Giordano Middle East, a joint venture, and opened its first shop in Dubai at the Burjuman Center.
That was nearly 15 years ago. Today Chugani is Executive Director of Giordano Fashions L.L.C. and Giordano Fashions India Pvt., Ltd, heading the group’s business in the Middle East, India, North Africa, Central Asia and Eastern Europe. He has successfully expanded the business from its original base in the U.A.E, and today Giordano operates 200 stores in the region including the Gulf Cooperative Council (GCC) countries, Saudi Arabia, Jordan, Iran, India, Syria, Bulgaria, Georgia and Armenia. An additional 50 stores are slated to open by the end of 2012.
Why It’s a Winner
What makes Giordano a winner in the Middle East said Chugani is that “the brand is easy to understand.” For Middle Easterners who are migrating from traditional clothing to modern fashion Giordano is an easy transition. With its emphasis on classic cotton trousers and polo and button-down shirts, the brand provides a simple approach to contemporary dressing.
One of the keys to Giordano’s business success is tight inventory control. “We are a JV running this business, unlike other brands where you have different agents who manage each country,” said Chugani. “We can share merchandise with other Giordano outlets worldwide. We can balance out inventory deliveries by diverting shipments to countries that urgently need merchandise, instead of being locked into shipping only to the franchise or distributor who placed the order.” This flexibility has also helped to mitigate mark downs.
Unlike many retailers who rely on discounts to move merchandise, Giordano keeps the focus on full priced goods. “We don’t display clearance merchandise in our main stores,” said Chugani. “We set up separate outlet stores in each region through which to clear the old merchandise.”
Keeping Pace with the Global Industry
Chugani said that being well informed is also part of his formula for success. His key source of industry news and information is Inside Fashion magazine. “Inside Fashion is a valuable resource providing me with a 360 degree look at the entire apparel and retail industry. I take the issues home so I can spend ‘quality time’ reading them. Everyone in our office looks forward to reading Inside Fashion when it arrives. We archive each issue and often refer back to articles,” said Chugani.
Growth Outlook
The market with the most growth potential is Saudi Arabia, said Chugani. “The demographics are very favorable. With a local population of about 28.6 million people, it is a very stable market. As the market opens up to television and the internet, the demand for casualwear is rapidly increasing,” he explained.