Dubai - Arabstoday
Dubai’s cosmetics and perfume retailer Paris Gallery may make its stock market debut as early as next year if market conditions improve, its group CEO said Tuesday. The retailer, which has mulled an initial public offering since 2008 but delayed the move due to poor market conditions, said sale of its shares would ensure the family-owned firm’s continuity. “Our group has decided to IPO [because we want to maintain] a leading position and to be able to continue,” CEO Mohammed Ar Al Fahim, told Arabian Business. “The main reason for this is not to raise money but that would be a byproduct, which is very positive. Usually 70-90 percent of second and third generation [run-companies] will fail for many different reasons, so an IPO is a safety belt for us. An IPO would make us more transparent, more structured, more accountable and more effective,” he added. The number of GCC-family owned companies looking to go public plunged in the wake of the economic downturn. The total value of IPOs in the Middle East dropped 94.8 percent to its lowest in five years in the first quarter of 2011, Ernst & Young said in March. The Dubai-based retailer Axiom Telecom was forced to abort its planned IPO last year amid concerns over market and liquidity conditions. The firm in June sold a 35 percent of its business to Qatar’s Mannai Corp.Paris Gallery said it hoped to sell its shares to the public next year.“I wanted to [IPO] in 2008 but we were not ready as a company. Then we targeted 2011 then this crisis happened. Now the process continues. Hopefully next year we’ll be more pushing and focusing but it also depends on other elements.” The luxury retailer - which also owns 40 outlets as well as a distribution arm that comprises 25 percent of its business - said it planned to expand aggressively into new markets. It aims to open 22 more shops in the next three to five years and to expand outside the GCC to India, Azerbaijan, Turkey, and Iraq.“The Middle Eastern market for us is virgin, is big [and] is not there yet,” said Al Fahim. “Now we’re discussing India, Azerbaijan, Turkey, and Iraq. Iraq is the priority now – [we hope to open] at least four outlets to start with.” Plans for the retailer’s Syria expansion have been frozen amid the country’s political turmoil. Sales at the company have increased 12 percent in the year-to-date, compared to the same period in 2010 and are expected to exceed sales in 2008, said Al Fahim, a record year for the company. “This year we are back where we were in 2008, [which] was a sort of a record for many people in the industry. This year may exceed 2008 for us. [Compared] to last year we are least making 12 percent more,” he said. From / Arabian Business News