DUBAI - UAE-based Pure Gold plans to open 35 stores in Saudi Arabia and Qatar starting later this year but has put the brakes on expansion in Dubai to consolidate its existing business amid a decline in sales, the group’s chairman said on Thursday.
The jewellery retailer is shutting down six Dubai stores due to weak sales and replacing them with new ones in other locations in the UAE, Feroz Merchant told Maktoob Business in an interview.
High-end shopping venues such as Wafi City, Khan Murjan Souk, Jumeirah Beach Residences and Souk Al Bahar in Burj Dubai Downtown are among the locations Pure Gold is closing.
“We are shutting some stores that are not performing well and opening them in places where we see more potential. We are opening two in Deira City Centre this month,” Merchant said.
Pure Gold has opened three new stores in Abu Dhabi and added one in Al Ain this year.
Jewellery sales in Dubai, the region’s shopping capital dubbed the City of Gold, are 50 percent down from last year due to the economic downturn, which has depressed consumer spending and tourist numbers have dwindled.
Merchant said the company’s revenue and profit will be down 20 percent this year compared with 2008.
And the company is now taking stock of the situation after the “dramatic growth” of the last few years and has delayed some expansion plans.
"Certainly we have put on hold (some plans) because we have to monitor the situation. We also have to rectify mistakes of the past dramatic growth from 10 stores to 75 stores in five years,” Merchant said.
Forty-five of the company's stores are in the UAE, while the rest are in Bahrain, Kuwait and Oman.
"Next year we will start expanding with a bang," Merchant said.
The biggest expansion is planned in Saudi Arabia and Qatar, the two countries that are pressing ahead with massive development plans on the back of their energy exports, while oil-poor Dubai tries to come to grips with a collapse of its booming real estate business.
"We will open a store in Doha by the end of this year. The target is to have 10 stores in three years,” Merchant said.
At the same time Pure Gold aims to be in all major Saudi cities such as Riyadh, Dammam, Jeddah, Mecca, Medina and Khobar.
"We are looking at starting a business in Saudi Arabia in the first quarter of 2010. There the target is 25 stores in three years," Merchant said.