Dubai discount retailer BFL looks east to double store numbers

Shutterstock/Ritu Manoj Jethani

• Stores in Singapore and Malaysia
• 117 megastores in GCC countries
• Another 52 planned in Saudi Arabia

Retail chain Brands For Less has revealed plans to almost double the number of BFL stores it operates in the next five years as it looks to countries such as Singapore for expansion.

The Dubai-based discount retailer is flush with cash from last month’s sale of a $360 million stake to the US giant TJX Companies, owner of the TJ Maxx chain.

BFL now plans to open its first store in Singapore this month, followed by Malaysia and other countries in South East Asia.

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It currently operates 117 megastores across the six GCC countries of the UAE, Bahrain, Kuwait, Qatar, Oman and Saudi Arabia.

The chain’s executive chairman and co-founder, Toufic Kreidieh, said the plan was to increase the total number to 220 stores in five years, which includes a further 52 shops in Saudi Arabia.

Kreidieh and co-founder Yasser Beydoun started Brands for Less in 1996 with $10,000 in an underground car park “in one of the poorer areas of Beirut”.

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“We were not fortunate enough at the beginning,” Kreidieh said. “We didn’t have real capital. It was so difficult, due to the fact that there were no resources and at the same time there was no social media. It was only word of mouth.”

Despite this, the founders set up the company’s headquarters in Dubai in 2000, opening the first store in the emirate, a 90 sq m property in Deira, with the help of a $40,000 loan from HSBC.

Since then, BFL has gone through the 2008 financial crisis, an oil price crash and, most recently, the Covid-19 pandemic, with its treasure hunt-style shopping – more formally, its “off-price retail model” – proving particularly popular during economic downturns.

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The model relies on the purchase of over-produced, or excess, branded goods at a lower price, and being able to sell to consumers at a discount compared with other stores that purchased the initial run.

The deal with TJX valued BFL at $1.2 billion. Since the Covid-19, the company has grown 40 percent annually, while the e-commerce side of the business has recorded double-digit increases.

“Over the years, we see the businesses growing and growing, but in the dark times, we see ourselves getting stronger and stronger because the whole demand curve shifts to a different level as the income of the people is getting affected,” said Kreidieh, who has added Toys for Less and Homes for Less to the company’s portfolio.

Mohammed Feras, associate vice-president of the Dubai Festivals and Retail Establishment, part of Dubai’s Department of Economy and Tourism, said his organisation was working hard to “change the perception about Dubai that it is very expensive”.

Feras said the affordable side of the retail offering was an untapped market: “Obviously, there’s still a gap to be bridged, but we are working towards that and we want that to happen as soon as possible.

“I think also the retailers are understanding this now. They’re working towards pricing strategies to make sure that they are catering for all types of budgets.”