Dubai: Whether you are particular about Yashica cameras, Clarks boots or Elizabeth Arden cosmetics, all these brands and many more are brought to the Gulf by Jashanmal. Jashanmal has maintained a strong presence in the region, focusing on wholesale and retail operations involving consumer goods in the UAE, Kuwait, Bahrain and Oman. In its 90th year of operation, Gulf News had a chat with Jashanmal's group president Gangu Batra about how the organisation grew from a small retail store in Basra, Iraq, to a regional heavyweight. The group's founder, Rao Sahib Jashanmal, a businessman of Indian origin, launched a retail store in 1919 in Basra. At that time, Basra was a bustling trading hub, and Jashanmal offered his consumers household items, men's clothing, stationery, as well as books and newspapers in a region where convenience stores weren't very common at all and goods used to be traded or bartered at souqs or bazaars.
"In those days, such a shop was a novelty, as the region was not very developed," Batra said. "People traveled even from Kuwait to Basra to shop at our outlet." Rao Jashanmal, looking for opportunities outside India, obviously made the right choice. As the store in Basra proved extraordinarily successful, he decided to expand to Kuwait in 1934. Kuwait, at that time, was an independent principality under British protection. "There was nothing [in terms of store retail] in Kuwait those days," Batra said. Rao Jashanmal received permission from the then British political agent in Kuwait, Harold Dickson, to open a store at Safaat Square, Kuwait City. He was the first to import canned food, bottled fruit juice concentrate and items such as ginger beer, "which became very popular", as Batra puts it. "There was no supply of such goods at all at that time," Batra said. In those days, Safaat Square was the destination of camel caravans from Saudi Arabia. Shoppers had to make their way among camels resting in the square to reach the Jashanmal store, he said. Encouraged by the successful business launch in Kuwait, Jashanmal set his sights on expanding into Bahrain, where his eldest son Narain established the next store in 1935.
"This seemed only natural, as Bahrain was the region's only destination of British Airways at that time, being a hub for travelers," Batra said. "We had no competition in those days, which made the launch of new stores even easier." However, as time went by, other retail groups discovered the opportunities of the region, such as Barakat from Lebanon and eventually British supermarket chain Spinney's. "This was the moment, in the 1950s, when Jashanmal stepped out of the food business," Batra said. He himself joined the group in 1953, when Jashanmal started to restructure its portfolio and set up new divisions to sell an extended range of consumer goods.
In 1956, the first store in Dubai opened, followed by another one in Abu Dhabi, when the Abu Dhabi Marine Exploration Company approached Jashanmal with the offer of a facility on Das Island. "This was when oil exploration started in Abu Dhabi. The customers came from the oil companies, and we received our store supply from Bahrain," said Batra. The first Jashanmal store in Dubai was opened at Al Nasr Square, known as Baniyas Square today. "Everybody came to Al Nasr Square for shopping, even from Abu Dhabi. Dubai was very different from what it is now, there where no tall buildings and no road congestion. One could even see the Airport Road from Al Nasr Square." Travelers, regional shoppers, and merchants from the nearby Dubai Creek port made the majority of Jashanmal's customers of those days in Dubai, which was the region's hub for imports and re-exports due to its low customs tariffs.
At that time, Jashanmal hadn't given much thought to establishing a corporate identity. "All of our stores looked different and not even modern," Batra said. "But the region and especially Dubai was growing, and Jashanmal was growing with it." Stores soon got a facelift and the group's brand name was emphasised. Besides the retail business, Jashanmal started to supply the region with a broad range of major international consumer brands on a wholesale basis. A warehouse was built, and the company started to act as franchisee for selected international brands. In 1998, for example, Jashanmal was appointed exclusive regional distributor for Clarks Shoes, and launched a shoe warehouse in the Jebel Ali Free Zone.
In November 1998, Jashanmal entered into an agreement with US-based Warnaco for the exclusive regional distribution of Calvin Klein underwear and leather accessories for men. In 1999, Jashanmal acquired Carlton Cards Gulf, the regional franchisee of American Greetings, the largest greeting cards company in the world In the meantime, Jashanmal had been opening stores in Oman, expanding its business range to four countries (UAE, Bahrain, Kuwait and Oman), but had retreated from Iraq. "Our first store in Basra was closed down long before that," Batra said. "When communism was implemented in Iraq [in 1958], there were so many restrictions imposed that we decided to close down the store. For example, it was no longer allowed to import goods from Western Europe. So we left Iraq. We are happier in a good and peaceful place."
Jashanmal also never expanded to Saudi Arabia, which — at first sight — seems incomprehensible as the kingdom is the region's largest economy. Batra observes: "Yes, I agree, but we also would have to struggle with legal restrictions. For example, if we establish a ladies boutique, customers can only be served by women and men are not allowed to enter. For this and other reasons we decided against an expansion to Saudi Arabia." Today, Jashanmal runs 116 shops and employs more than 1,000 people in various divisions. In the UAE alone, Jashanmal operates seven department stores and dozens of franchise stores and bookshops. However, the global economic crisis did not pass by unnoticed. "Our growth has been well over all those years, but of course we felt the economic crunch," Batra admitted. "Our business has come down, yes, but we were not the only ones affected. But I understand this as part of life. Sometimes it goes up, and at other times it goes down."
The economic crisis reflected in Jashanmal's declining profit in 2009. "Yes, our profit has been reduced, but we can live with it. At least we earned a small profit." However, the company reacted with internal restructuring and tighter financial control. No staff were laid off. "Thank God. We don't want people to leave who have worked with us for many years," Batra said, adding that no stores have been closed due to the crisis. "The good thing is, this year we are already feeling an upturn. The Gulf economies will be growing again. Our business will be slower in the future as it used to be, and this is good for us. When things go up too fast, they can fall down fast as well. However, new shop openings will not take place as frequently as before," he said. The business environment too has become more reasonable, he added. "Earlier, rents [for retail space] in Dubai and elsewhere went up constantly, now things are a lot better for us." Another issue is the number of malls in Dubai, which, he reckons, has reached a point of saturation. "You only have to take a look at the malls on the map and compare it with the population. Where are the sales revenues supposed to come from? We have high prices now in the malls, compared to earlier times, when prices were low. You can buy fashion brands everywhere in the world, and today they are not necessarily cheaper in Dubai, despite its tax-free status. There are no bargains anymore," he said.
In this respect, one important target group for Jashanmal remain tourists. Batra thinks that tourism to the Gulf is beginning to pick up after a slowdown caused by the global financial crisis which, however, led to lower travel and hotel prices. "Dubai still has many tourist attractions, and tourists are supposed to shop here. We want the people to buy here, and not in Europe or elsewhere."
But what is it, in the first place, that makes the difference in shopping at Jashanmal stores, compared to its competitors?
"We offer value for money, meaning that customers are getting more for what they spend," Batra said. "Besides that, our staff gets special training to give customers a good welcome and to show they know the products they are selling. And we provide after-sales service as an additional support to the warranties of the manufacturer." To trace and detect the newest trends, Jashanmal constantly sends senior staff to visit suppliers and discuss with trading partners, he added. However, the question remains: Why is Jashanmal, a family business giant whose founders originate from India, not a dominant player in the subcontinent's retail sector apart from a few wholesale operations? "We don't run own shops in India for the time being due to the different market regulations there," Batra explained. "However, we are constantly evaluating this issue, and eventually it will be a decision of the board if we put a foot on the retail market there or not."
Is it such a difficult decision to step into an emerging market with 1.2 billion people?
"The population size is not the issue. Most of India's population lives in the countryside," Batra argues. "But I agree, there is a growing middle class which are our target group. One has to think about it." Concerning the debt restructuring efforts of Dubai World and its allied entities, Batra believes that this would "definitely" be helpful. "Finance should always be under good control." But he says that "what has been built in Dubai was no waste, Dubai will continue to grow. It was the first time ever that Dubai had to deal with a restructuring issue like this, it was an eye opener."
The Jashanmal Group is a wholesale distributor of consumer goods and a broadly-based retail operator in the Gulf region. The company currently operates 116 stores and franchise shops. The stores stock everything from pens, cameras, luggage, leather, fashion accessories, shoes, linen, houseware, crystal, glass, giftware, books, household and kitchen appliances. Among the brands in store are Clarks, Burberry, Yashica, Cross Writing Instruments, Victorinox (swiss knives), Rimova, Kenwood, Hoover, Courvoisier, Elizabeth Arden, Calvin Klein and Carlton Cards. The newspaper and books division offers books and titles from Penguin, Random House, Hachette as well as international magazines and newspapers. Jashanmal currently operates in the UAE, Kuwait, Bahrain and Oman. The group employs more than 1,000 staff and total annual revenue is estimated at $500 million. Group president Gangu Batra is retiring this year after spending more than half a century with the company.
Jashanmal was founded in 1919 by Rao Sahib Jashanmal in Basra, Iraq as a general store selling many of the products that are still sold in the stores today. Expansion through the GCC followed the path of oil discovery, first into Kuwait in 1934, then Bahrain in 1935 and subsequently into UAE, with stores in Dubai in 1956 and Abu Dhabi in 1964. In the environment of fast expanding markets Jashanmal evolved from solely a retailer to also specializing in the wholesale and distribution of consumer products.
Photo and text from Jashanmal's Website
Dubai's communication with the "outside" world was poor in 1971. Local newspapers had yet to appear; television was in a "start up" phase; radio was limited to local services. Getting news of "home" was difficult. Jashanmal's imported a range of foreign newspapers. Driving from Jumeirah to Jashanmal's via Al Maktoum Bridge and Al Maktoum Street to buy a copy of UK's Daily Telegraph became a routine event. But often it was a wasted journey. Either the newspaper delivery was late or, more often, censorship had made the newspaper unreadable and not worth buying.
Jashanmal's Store did not quite match the standard of Jashanmal's modern stores in Malls such a City Centre. The Store layout was simple. Goods were displayed on shelves. Some looked as if they had been on display for a long time! Everything seemed to be covered in a fine dust which was not surprising given the Store's proximity to the sand and dust of Al Nasr Square. But if you looked hard enough you could probably find what you were looking for!
Driving along Al Maktoum Street to Al Nasr Square and Jashanmal's Store became a routine journey in 1971!