Macy‘s Inc. is to push into Kuwait with the country‘s first Bloomingdale‘s store, come spring 2017, through a licensing agreement with the Al Tayer group, WWD reports.
While the opening is a year away, it‘s expected that oil prices will remain low for the foreseeable future and create economic pressures the region hasn‘t seen in decades. However, Al Tayer argued that this won‘t affect the long-term viability of retailing in the region.
“Kuwait has always been the cultural centre of the Gulf region. It had oil much earlier than Abu Dhabi and Dubai and as a result, it has the most sophisticated and well-travelled people from the region,” CEO of retail Khalid Al Tayer, told WWD. “The people of Kuwait really, really understand what the world has to offer. Oil prices coming down for us is not good news, but the economy can weather the current downtrend. It‘s quite a stable, resilient economy — oil based but with some of the best homegrown regional companies, in retail and logistics.”
The Bloomingdale‘s store will occupy 93,000 sq ft over three levels in the 360 Mall, a six-year-old upscale center in Al Zahra.
It will be a curated, smaller version of the traditional US Bloomingdales department store with a focus onadvanced contemporary and designer ready-to-wear, footwear and accessories including handbags and jewellery. There will be no men‘s wear, children‘s wear or home products.
Macy‘s has been criticized by some for slow expansion oversees. The first international Bloomingdale‘s was opened in Dubai in 2010, also licensed to Al Tayer. Last year it was announced that Macy‘s would open its first overseas site, through Al Tayer, in Abu Dhabi in 2018, in the mall where a Bloomingdale‘s will also open that same year. In addition, Macy‘s is working on launching an e-commerce site in China on Alibaba Group‘s Tmall Global.
“Bloomingdale‘s in Kuwait is another step forward in our strategy for capitalizing on the international potential of Macy‘s and Bloomingdale‘s, both of which are well-known retail brands around the world,” said Terry J. Lundgren, Chairman and CEO of Macy‘s Inc. Lundgren told WWD that the retail group is continuing to learn “how best to translate” Macy‘s and Bloomingdale‘s for international customers.
“The Bloomingdale‘s brand positions itself as an international company,” said Tony Spring, Bloomingdale‘s Chairman and CEO. “It‘s the result of a lot of years of work by lots of different leaders. We believe there is more opportunity for growth in all channels of business and international. So we will continue to look for those opportunities and be appropriately aggressive. It‘s a matter of finding the right opportunity at the right time.”
Spring told WWD that the decision on Kuwait was based on the experience working with Al Tayer and the performance of the Dubai store. He described the arrangement with Al Tayer as a typical licensing partnership, where Al Tayer owns and operates the store, and Macy‘s Inc. receives licensing fees and royalties based on sales. The difference is that Macy‘s Inc. maintains a “close collaboration” with Al Tayer on the design and merchandising of the stores. It allows Bloomingdale‘s to expand internationally with a partner who knows the market and its consumers. It‘s less risky than owning overseas stores though there is a sharing of the profits.
“As you look at other parts of the world, you have to find those partnerships and real estate opportunities that provide chances for growth. I wouldn‘t rule out more of an international presence for Bloomingdale‘s over time,” Spring said.
Spring described Bloomingdale‘s Dubai as “one of our top-performing stores. It‘s highly productive and is a great expression of the Bloomingdale‘s brand.” Macy‘s Inc