DUBAI — The creator of the world’s largest shoe store is now creating a hub for three more luxury product universes.
This story first appeared in the November 18, 2014 issue of WWD. Subscribe Today.
The Dubai-based Chalhoub Group, creators of Level Shoe District, is developing a dedicated megastore for handbags, beauty and children’s wear, WWD has learned.
At 200,000 square feet, the yet-to-be-named project is set to open in Abu Dhabi’s Yas Mall in November 2015 and is being billed as the largest department store in the region.
Chalhoub has yet to name the project, which will be the new mall’s anchor tenant. But similar to Level, the company plans to create what co-chief executive officer Patrick Chalhoub describes as a “category killer” in those three segments, offering more choice than a customer can find anywhere else.
Disclosing the development in an exclusive interview, Chalhoub said: “We are in a part of the world where we have to be unique, especially if we are creating our own brand. It has to have a ‘wow’ effect. Each of the three categories will have its own journey, all under one roof.”
Located on the edge of Abu Dhabi, about a 50-minute drive from Dubai, the man-made Yas Island is a major leisure destination that hosts the Formula 1 Grand Prix every year in November and is home to the Ferrari World amusement park.
The new Yas Mall, slated to open next week, is linked to the amusement park.
“The profile of those that visit Yas is families and young people, so we created a concept to make it engaging for those that will visit most,” Chalhoub explained. The company worked closely with mall developer Aldar to create a space designed for customers visiting Yas Island.
Bolstered by the success of Level, Chalhoub Group is focusing on experience-based shopping. Chalhoub said the store would go beyond just offering one of the widest selections of products in each of the three categories.
“We want to give our customers a full experience, so each category will have its own journey and depth of choice,” he said. “This will be a place where clients can come and will spend the whole day discovering things and pampering themselves.”
The concept is to house three concepts under one roof. Handbags were a no-brainer since it is a category that is very strong in the Middle East.
However, Chalhoub hopes to change how customers view leather goods. “Bags here in the Middle East have always been an expression of status,” the executive explained. “We’d like to offer a larger variety to make it an expression of yourself, the individual. We will mix institutional brands with up-and-coming ones and even have bespoke services.”
This model has worked well for Chalhoub at Level. When the store launched two years ago, it carried brands never before seen in the region –– like Paul Andrew and Aquazzura –– alongside established names like Gucci, Louis Vuitton, Chanel and Christian Louboutin. Sales of those brands were strong, changing the conception of what consumers in the Middle East were interested in buying.
The company hopes to do the same for all handbags, beauty and kids’. The children’s category will focus on a product mix for the seven-to-15 age range, targeting the same visitor demographic as the amusement park.
Chalhoub explained that this is a demographic where kids heavily influence shopping decisions. “We want children to have such a pleasurable experience where they learn to love shopping early for themselves,” he said.
The store will feature restaurant concepts as well as many services for each category. Beauty in particular will offer a wide range of pampering opportunities.
“We want to have every type of service a client could want, from a spa for your hair, a place for eyes and lip treatments, even traditional henna art. Our client should have every possibility for pampering,” he said.
This all-under-one-roof model seems to work in the region.
“Leisure is a huge component to the success of retail in this part of the world,” said Matthew Green, head of research at real estate consultancy CBRE. “It is what gets people to come in and spend longer in a mall. You increase the dwell time and increase sales, and everyone is happy.”
Not that success is a given.
“The risk in creating our own concept is high,” Chalhoub acknowledged. “So high that we just cannot fail.” He noted his plans are agile, and not being a franchise model allows Chalhoub to adjust to market demands. “Level’s success gives us the assurance that we can do it,” he added.
Level had the benefit of being located in one of the world’s most visited destinations, the Dubai Mall, which last year saw footfall reach 75 million visitors. “One of the challenges of Yas Island is that traffic will take time to pick up,” Chalhoub admitted.
He argued that a full-service destination would coax customers, whether in Abu Dhabi or Dubai, to come spend their entire day there. He also forecasts that people in time will not differentiate between Dubai and Abu Dhabi: “This will be a destination for the entire Emirates.”
For the family-run company that began 60 years ago by bringing luxury franchises to the Middle East, moving into creating new retail concepts and potentially even exporting them reflects a shift in market dynamics. “We have more to bring to the table than just executing franchises,” said Chalhoub. “The Middle East is a key component of the global luxury consumer base.”
Understanding the market and creating concepts catered to them is a natural evolution.
“We have had many demands to replicate Level, but we have no plans to do that in the Middle East,” said Chalhoub. However, he cited requests to bring Level to Milan and New York, which the company is considering. “It is definitely food for thought. The market and the place have to be right for it and we have to be able to add value,” he said.