Villa Moda, the Kuwaiti retailer that helped put the Middle East on the international fashion radar, is gearing up to go global with a powerful partner, WWD has learned.
This story first appeared in the September 22, 2008 issue of WWD. Subscribe Today.
The Dubai International Financial Center, which is owned by the Dubai government, has taken a majority stake in Villa Moda, which operates seven multibrand emporiums in the Gulf region and some 50 designer shops for brands from Gucci and Prada to Dolce & Gabbana, as franchises or joint ventures. Villa Moda is quoted on the Kuwait Exchange.
The deal speaks to the Middle East’s rapid transformation from a robust market for foreign retail brands to an acquirer of global brands with international ambitions. It follow’s last year’s acquisition of Barneys New York by Dubai-based Istithmar.
DIFC bills itself as one of the world’s fastest growing financial centers, angling for the status of New York or Hong Kong. It is also the largest shareholder of Deutsche Bank and a strategic shareholder in Sweden’s OMX stock exchange.
The deal also represents a chance for Villa Moda founder Sheikh Majed Al-Sabah, one of the region’s most high-profile retail pioneers, to leverage his vision on the world stage in tandem with the international ambitions of the DIFC.
“We’re looking at Europe, America and Asia very closely,” Al-Sabah said in an exclusive interview. “If you want to deliver your message, it has to be done in a powerful way.”
Financial terms were not disclosed, however, market sources estimate annual revenues at Villa Moda to be in excess of 60 million euros, or $86.3 million at current exchange rates.
Al-Sabah, a front-row fixture at European shows, is absent from Milan Fashion Week in observance of Ramadan. He said he would remain chairman of Villa Moda Group and its creative director, however, a chief executive officer will be appointed to help steer the company’s expansion.
Al-Sabah said international expansion would proceed in tandem with a broader push into the Middle East region, including Saudi Arabia, Egypt, Morocco and Jordan, along with a shift from what he called “two-dimensional retailing into three-dimensional retailing.”
He explained that would mean incorporating arts and culture, well-being and lifestyle services and experiences, plus real estate development, into the retail mix. Villa Moda already partners with cutting-edge architects and designers, and mixes design objects, books and luxury foods with a range of international fashions in its Villa Moda emporiums, including a new Bahrain unit by Dutch design wizard Marcel Wanders. (See story on this page.)
Asked what precipitated the sale, Al-Sabah said family-run businesses have trouble stretching beyond a regional scope, especially in today’s difficult business clients. Representatives of DIFC will replace Al-Sabah family members on the board of Villa Moda Lifestyle, he added.
While Dubai developers and entrepreneurs are famous for “the largest, tallest, biggest, widest,” the DIFC has a different orientation, Al-Sabah said. “That’s not their game. There are for luxury, for niche, for quality. We are not looking at rolling out hundreds of Villa Modas around the world.”
DIFC acquired Villa Moda via its lifestyle division and recently added a luxury boulevard called Gate Village adjacent to its iconic DIFC Gate building. Villa Moda is constructing two units in the complex, with Spanish industrial designer Jaime Hayot on board for the project. Freestanding units for Marni and Dries Van Noten operated by Villa Moda have already opened in the complex, and boutiques by Martin Margiela, Nina Ricci, Vivienne Westwood, Jil Sander, Anya Hindmarch and others are coming soon.
But the Villa Moda brand will be Al-Sabah’s global calling card, with energetic merchandising reminiscent of modern souks, innovative store designs and Middle Eastern hospitality. “Retail should focus not only on selling products. It should be more educational, artistic and generous,” he said. “It’s taking the retail environment and making it a theater where you sell dreams.”