Big interview: Al Khaayat Investments retail CEO Jon Knight

As the retail CEO of Al Khaayat Investments (AKI), a Dubai-based franchisee operation, ex-UK retailer Jon Knight has overseen the Middle East launch of a number of familiar British brands.

In the role of franchisee, Knight and the family-owned AKI have helped the likes of fashion retailer Supergroup and health-food specialist Holland & Barrett penetrate the Arab market. The company is also the franchise partner for the 307-year-old luxury department store Fortnum & Mason, which undertook its first foray outside of the UK in March this year with the opening of a store in Downtown Dubai.

More and more UK names are expected to look abroad in the 12 months ahead – with Dubai and the Middle East an obvious destination for a number of them, as they look to tap into a strong shopping culture and a wealthy expat population. For any that do, and for any retailer looking at international expansion, Knight would advise taking "an eyes wide open approach".

"Everyone looks at international expansion as a way to support their domestic sales, which is the right way to look at it," he told Essential Retail.

"You have to be aware if you are going international that you are going to be working within territories that may have unfamiliar cultures. There will be different ways of thinking and different ways of perceiving how to do retail, or what should sit next to what."

In the Middle East, where businesses and buildings are effectively "brand new" and retailers are based in glass-fronted, rectangular box locations within the region's growing number of malls, it is a very different situation to high street properties and big-city sites in the UK – some of which are hundreds of years old, helping add unique appeal to a brand.

Knight remarked: "You are going into boxes over here – and they are all are very similar. You have to create an identity within a shopping mall arena."

The retail CEO said he was therefore "delighted" to attract Fortnum & Mason to Dubai in the spring in what was only the UK business's third property opening in its long history. The 10,000 sq ft, three-floored standalone store is situated adjacent to the Dubai Mall, directly in front of the world's tallest building and prominent tourist attraction, the Burj Khalifa.

"We've taken a version of the Tea Salon and the Parlour, and downstairs we have an edited retail mix of products – we're over the moon with how the performance is and it's just a lovely brand to have in the portfolio," he explained.

"It really gives us some credibility, and the heritage and provenance of the brand really speaks for itself."

Heritage and integrity are key features that Knight believes must be accentuated when retailers are looking to grow abroad, and he talks from experience having been a franchisor at Marks & Spencer (M&S) for a number of years where, among other ventures, he took the UK fashion and food high street business into Libya.

Entering any new market brings operational risks, he added, before suggesting that "proper store opening procedures and processes" must be implemented and true collaboration between brand and franchisee is required.

"The integrity of any brand you work with is probably the single most important part of working internationally," he noted.

"It's something I learnt with M&S. The integrity of the M&S brand was so valuable and it had to be maintained at all costs. By doing that you can drive great product, great service and great pricing.

"Franchisees need an understanding of the brand, it's sustainability, growth potential, opportunity and whether it's got the best placement in the malls. You can get plenty of locations over here, but you get very few right locations."

AKI is helping international brands find those right locations, with Holland & Barrett expected to be trading from 14 stores by the end of 2014 and from a total of 21 stores by the end of next year. The Dubai-based company also looks after Thai restaurant chain Ping Pong, and is soon to add a second site opening for the brand.

Alongside its list of international franchise clients which span the food & drink, fashion and health & beauty sectors, AKI also runs its own brands including contemporary Arabic cuisine provider NAR and the Bin Sina pharmaceutical chain. By the end of the year there will be 70 Bin Sina stores in Dubai, and there are plans to roll the organisation out across the Gulf Cooperation Council (GCC) in the coming years.

So what are the best opportunities for retail in the GCC and beyond?

"Dubai is a fabulous opportunity and Abu Dhabi is coming up very quickly – the UAE is a fabulous place to be," said Knight.

"The Doha market is great – there are so may retail opportunities there but you have to bear in mind that the population isn't as great as the UAE. The UAE is very good at getting visitors in and transit customers out of the airport for a couple of days into hotels. Doha's size will always limit the scale of the operation."

Knight also makes a case for the Kuwait consumer market as "globally brand aware", Bahrain as a country that is "growing again", while there is apparently "lots of opportunity" in the highly populated Saudi Arabia.

"I think Egypt will come back and is coming back, and is a phenomenal opportunity for retail because of the sheer diversity and size of the market," he added.

"I opened a store in Libya with M&S and it was doing tremendously well; there's some instability there at the moment but when the market comes back I still think it'll throw up a huge opportunity for the industry as it has 2,000 km of Mediterranean coastline and some of the most fabulous archaeological sites in the world."

Opportunity awaits in the Middle East and Africa, it would seem, for internationally-focused retailers looking to expand their horizons.

Jon Knight is a confirmed speaker at the International Retail Franchising Summit, which will run on 11 March 2015 at London's Olympia.

For more information or to register for the event please visit the official website.

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