Retail

Kuwait’s Alshaya scales back operations in Egypt

January 18, 2024, 1:05 PM

Architecture, Building, ShopAlyshaya, which operates brands including Victoria's Secret in Dubai, will close 60 stores in Egypt this year — Alyshaya, which operates 70 brands, including Victoria's Secret in Dubai, will close 60 stores in Egypt this year

Economic situation challenging
Alshaya to close 60 stores
Around 375 jobs to go

Kuwait’s Alshaya Group, one of the Gulf’s largest franchise owners, is scaling back its operations in Egypt due to “the difficulties faced by overseas businesses” in the North African country.

“As a result of the economic situation over the last three years and the difficulties faced by overseas businesses trading in Egypt, we have taken the very difficult decision to reduce our operations in the country,” a spokesperson for Alshaya Group said in a press statement.

The Kuwaiti retailer operates 70 brands in 4,000 stores across 18 countries, including household names such as Starbucks, H&M, Mothercare, Debenhams, American Eagle Outfitters, PF Chang’s, The Cheesecake Factory, The Body Shop, MAC, Victoria’s Secret, Boots, Pottery Barn and KidZania.

Alshaya Group has operated in Egypt for 18 years. The spokesperson confirmed the pull back would include “a reduction in the number of stores”.

Bloomberg reported that about 60 stores will be closed and around 375 employees laid off.

Egypt has faced economic challenges in recent years after the Covid-19 pandemic, further compounded by the Ukraine war, the Israel-Gaza conflict and the impact on the Suez Canal of Houthi attacks on ships in the Red Sea.

Cairo agreed a $3 billion International Monetary Fund support package in December 2022, but received only an initial payment of $347 million.

Elevated inflation

Analysts from research company BMI yesterday forecast that Egypt’s economy will expand by about 4 percent in 2024. At the same time, its headline annual inflation, which hit an all-time peak of 38 percent last September, will remain elevated.

“We are committed to the market and look forward to continuing to trade and hopefully growing again in the near future,” the Alshaya Group spokesperson added.

While in the past the UK was the go-to market in bringing brands to this part of the world, the group’s chief executive John Hadden told AGBI in July the company’s attention has switched to the US.

“When you think about fast food and coffee, the brands in the US are larger and more well known than the ones in the UK.”