Shireen El Khatib
In 1992, Al Tayer, a Dubai trading company best known for keeping the local sheiks and emirs rolling in the latest Jaguars and Land Rovers, decided to add jewelry and fashion to its portfolio. Shopping in Dubai at that stage was largely theoretical—there were just a handful of retail options and lots of eye-popping plans on architects' drawing boards. But shopping was said to be a cornerstone of the master plan to draw tourists to Dubai, and the Italian jeweler Bulgari, among others, was looking for a partner to break into the Middle East. Al Tayer headhunted Shireen El Khatib from the advertising industry to manage the first Bulgari store.
"Thinking jewelry, they probably thought a woman would be more appropriate," says El Khatib, 44, now ceo of Al Tayer Group's luxury-fashion arm, Al Tayer Insignia. Though she is not Emirati, El Khatib had lived in Dubai from the age of 8 and also had a multicultural edge: her mother is Egyptian, her father was Palestinian and her parents had encouraged her to study business at the American University in Paris after high school for exposure to both American and European cultures.
At Al Tayer, she threw herself into learning Italian, fine jewelry and Carrara-marble qualities and shrugged off telephone calls to the store from confused locals looking for visa information for Bulgaria. "It was Bulgari's first store in the Middle East and No. 18 worldwide. There was a lot to do in terms of educating the customer here," she remembers. Quickly Al Tayer struck a deal for a store with Giorgio Armani, and those stores attracted other Western brands.
Although Al Tayer was new to fashion, the company had established itself as a premium vendor of cars and also ran a well-regarded high-end contemporary- and modern-furniture showroom in town. "The reputation was already 'They bring the best to town, and shopping in their stores is an experience,'" says El Khatib, who translated that corporate ethos for fashion. Under her leadership, the company scrupulously conformed to the European brands' guidelines in terms of windows and merchandising; staff were trained and uniformed; and traditional sales practices, including negotiating on prices, were prohibited.
Sixteen years later, Dubai has added some 20 million sq. ft. (1.86 million sq m) of retail space, and El Khatib finds herself at the head of the largest luxury retailing operation in the Middle East. Al Tayer Insignia represents 35 brands, including its original partners, but also Gucci and Yves Saint Laurent and other Gucci Group labels as well as Loro Piana and Coach. She launched two multibrand stores—Ounass for fashion and accessories and Azal for fine jewelry—to "incubate" niche and promising up-and-coming brands that weren't yet well known enough to justify a freestanding store. She also inked a license deal with the London department store Harvey Nichols.
"Shireen in the Emirates is the epitome of fashion," says Robert Polet, chief executive of Gucci Group, which has worked with Al Tayer for 12 years. He describes her as "extremely articulate" and says he particularly appreciates her "fast and direct" working style. "She has done a tremendous job to help the Al Tayer Group build the fashion and luxury goods empire they have today," Polet says.
In addition to financing stores and staffing them, local partners are helpful in interpreting the complex market. There are the tourists—currently Dubai is a popular destination for Russians, Indians and Arabs from other gulf states, among others—but more than 60% of Al Tayer's luxury customers are local residents. About 40% of those are Emiratis, and just under 25% each are Arabs and Europeans. For women, categories like shoes, watches and bags are hot, because those items are visible even with the traditional long black abayas. There are surprises too: one would assume men's preference for traditional robes would limit sales of Western-style suits, but El Khatib says the robes are so loose that men tend to gain and lose weight easily. They don't hesitate to invest in a full new wardrobe of suits when they travel abroad.
In a startling twist in June, the government issued a warning to U.A.E. locals about rampant consumer spending, citing a 122% increase over the past five years and underscoring sky-high per capita spending, more than seven times the average in the rest of the Arab world.
Laws require foreign brands to work with a local partner, and Al Tayer has well-positioned competitors in the region. Christian Dior, Louis Vuitton and other brands in the LVMH Group are represented by Chalhoub Group of Dubai; brands like Prada and Ermenegildo Zegna are tied up with other companies. For years they have jockeyed for position as prestigious shopping centers were opened: the Emirates Towers in 2000 and Mall of the Emirates, with its 450 stores and indoor ski slope, in 2005.
But nothing matches the noise and nail-biting that led up to the late-August opening of the new 3.77 million-sq.-ft. (350,244 sq m) Dubai Mall. The developers are projecting 30 million visitors in the first year. "The earth has a new center," boasts the website of Emaar Properties, the developer of the mall, and even El Khatib is compelled to admit that the fuss is probably warranted. "It is the only mall in the world with 1,200 stores," she says. "It will have one of the largest aquariums in the world. It is adjacent to the tallest building in the world, which has the first Armani hotel—there are so many biggest, tallest firsts that it will be a destination."
Besides the amenities, which also include elaborate children's entertainment facilities and an Olympic-size ice rink, executives say they are enthusiastic about advertising techniques, including "moments of exclusivity" in which brands can pay to have all the LED screens at the commercial center light up with their logo simultaneously.
However, the Dubai Mall is not the final word. Other big, sometimes zanier projects are in the pipeline 90 minutes away in Abu Dhabi, as is a shopping complex that will dwarf the Dubai Mall. The larger venture is planned for an unlikely location, alongside the dinosaur area of the major theme park being built in Dubai. The one-upmanship worries some retail executives. They fear that the rush to open bigger and better malls will destabilize the market and eventually empty out older ones.
Outside the U.A.E., other regional markets, especially Qatar, are heating up. El Khatib's focus these days is on expanding to Saudi Arabia and Qatar by the end of the year. And she plans to launch luxury brands in Kuwait for the first time in early 2009. "Our accent is on geographical expansion," she says. "Now our portfolio is mature, so let's focus on growing these brands in the region." —Sarah Raper Larenaudie / Dubai