Investor Profile: The Wealth Company
In the first of a series of features on investors seeking Master Franchise opportunities, Stuart Anderson profiles Saudi investment group the Wealth Company
The Wealth Company has been formed with the purpose of investing in multiple fashion retail Master Franchises for Saudi Arabia and the surrounding gulf region. Combining local market know-how and 'futuristic entrepreneurial vision', the group is seeking concepts that offer a high quality fashion retail experience with unique décor and shop fittings.
"The Wealth Company believes that it possesses the insights to all areas essential for an effective and profitable business in the Kingdom of Saudi Arabia, and is committed to offering products and services which conform to established international standards," says the group. 'Innovative promotional ideas will be employed to build on strength to business concepts."
The Wealth Company's is part of a major investment group that was established in 1982 in Saudi Arabia. The company achieved group sales of US$700 million in 2006 and will be listed in the Saudi stock market this year. The group created several strong joint ventures with major international companies such as Elopak (Norway), Combibloc (Germany), and Saint-Gobain (France), and already owns five Master Franchise licenses: US coffee and tea distributor Joffrey's Coffee & Tea Company; German children's fashion retailer Kanz; US pizza brand Pizzacono; Malaysian corn in a cup retailer Daily Fresh; and Malaysian fashion chain Voir Fashion.
The Wealth Company is looking to position itself as one of the leading fashion retailers in Saudi Arabia and the gulf region by developing networks of franchise stores. The group expresses a commitment to providing 'the highest quality of product, service and customer care', and will draw upon its contacts and knowledge of local market trends and consumer needs to develop international brand opportunities. 'Even though there are a number of international and local fashion chains in the Saudi and Gulf area markets, many experts are expecting very high growth of the Saudi economy and Saudi business,' says the group. 'Being the biggest country and market in the entire gulf region, Saudi Arabia still has the potential for growth and the market can accommodate more business opportunities, especially with Saudi Arabia expected to join the World Trade Organisation.
'Women's clothing continues to be the most dynamic area of retail in Saudi Arabia. Fashion retail sales is growing significantly. The major reason behind this growth is the increasing popularity of branded and premium fashion products over other retail products. Another factor that helped the growth of the industry is the steady increase in spending power.
'Saudi Arabia has one of the highest population growth rates in the world. The latest figure showed that the Kingdom's population stands at 22 million, almost three-quarter being Saudis. Saudi Arabia has a young population, with more than 45 per cent of the population 14 years old or younger, a major thrust for the consumer market in general and the apparel market in particular. The market is expected to expand by an average of four per cent annually over the next two years. The market is changing as more male youths are opting for western clothing.
'US branded apparel, especially at stand-alone boutiques, present excellent opportunities for a niche market. Best opportunities are for light-weight apparel in such fabrics as cotton, polyester-cotton blends, and silk or cotton for lingerie. The gulf area apparel market is segmented by up-scale, mid-level, and lower-end markets. Well-known international designer names are already very popular and highly sought after. French, Italian, and lately German designer clothes are attracting new buyers in the upper scale market.'
The Wealth Company is seeking Master Franchise packages from suppliers of quality clothing with a worldwide reputation. This demand is focused on concepts that include a well-designed and attractive shop-fit which gives an impression of quality and power, with moderate competitive pricing and calue for money products and services. The company expresses a preference for franchisors that provide the accumulated know-how of the business, including management, sales and marketing, business administration and accounting, through comprehensive training programmes, and then maintain ongoing support through launch action plans, sketches and artistic impressions of the stores and supervision of site development (including contracting and shop fittings installation) until day one of operation.
To discuss putting an investment proposal to the Wealth Company, call Rola Talal Badkook of Franchise Development Services Middle East on: +966 2284 2223 Send proposals to: PO Box 221, Jeddah 21411, KSA Or e-mail: email FDS Saudi Arabia