Baraka Retail Group was formed in 1979 and their mission is to offer their customers the best retail journey in Egypt through their brand stores and ambassadors. Here, RLI sits down with company CEO Ahmed Ragab to talk about the growth of the company and its expansion into different industries in recent years.
Launched 43 years ago as a wholesale business, Baraka Retail Group originally focused on optics within its home nation of Egypt. Today, they are proud to be operating in an array of different industries.
Over the years, the company has expanded its presence within Egypt and the Middle East, and today they have more than 15 brands retailing across 70 stores in Egypt and the GCC. They operate across three divisions, optics, fashion and e-commerce and this is is soon to expand with their private labels in regional markets.
“Currently we operate 47 optical stores across Egypt, and 20 fashion stores in Cairo and Alexandria, and recently we launched five new e-commerce brands that are available in Egypt, UAE, and Saudi Arabia along with a minimal presence in European markets,” says Ragab.
While recent times have been difficult for companies across the globe because of the pandemic, the DNA of the group since its foundation has been built on a structure that allows them to be very flexible and adapt and absorb any new market conditions and continue their growth patterns. This method has proved successful over the past decade that has included four years of political unrest, two currency devaluations and two years of the Covid-19 pandemic.
“To sustain the business through these testing times, firstly we tackled how to sustain our cash flow under severe trading conditions that included a forecast of a 70 per cent drop in turnover. Next, we analysed our brand and store profiles, digging deeper into structural operations and filtering growth operations in-line with the new conditions in which we found ourselves. We fully believe that every crisis offers new opportunities, and we are set to grab them with both hands,” explains Ahmed Ragab, CEO of Baraka Retail Group.
The business has launched three new concepts recently based on the strategy above. Within the optics division they launched five new People Optics stores, which serves the sophisticated fashion eyewear segment and is driven by limited editions. This concept enables them to capture the missing puzzle in the optics industry, engulfing the market with four different concepts beginning with value eyewear, through to branded eyewear and sophisticated eyewear. This has expanded their market share to 40 per cent of the Egyptian eyewear share.
Meanwhile in the fashion division, they have launched Mellow, a private label that offers entry-level women’s fashion. The company grasped an increasing gap in the market, which has more dependence on local manufacturing, to align with their strategic scope of increasing their local manufacturing contribution compared to their imported goods contribution in the fashion division.
Within e-commerce, Baraka has unveiled four new brands, linked to celebrities and influencers through a drop model which is a limited, non-repetitive drop cycle that is altered every three months to ensure continuous hype and freshness in their offering which is especially important in e-commerce spaces.
When discussing the future and potential new markets, Ragab explains that the next year or two will be all about delving deeper into these three new launches and searching for more retail concepts and trends.
“As for new markets, with our retail brands we have a far-reaching strategy and the decision to expand internationally is reached once we mature the brands in their local markets. While for online brands, expansion and launches into new markets is already in the works, with a logistics centre having opened in Dubai to support GCC markets running in parallel to fulfilment centres in Egypt,” Ragab comments.
To maintain their positon in the market, they are always ensuring flexibility in their structure and their financial strategy to enable the company to adapt and develop with new trends. They do this through a lean structure and maintaining deep cash reserves to adapt and react quickly.
The role of social media cannot be underestimated in today’s retail world, and the business has leveraged this segment to tell their stories and they have started a trend of creating tailored drops for social media influencers which are exclusive to Baraka’s platforms.
The latest drop launched for one of their influencers is a double sided project, which also incorporates sustainable fashion that has begun a trend in the Egyptian market and through social media mediums, these trends are gaining traction faster.
Baraka Retail Group has enjoyed fantastic success across its brand portfolio and its three main pillars that support its journey are diversity, resilience and growth. Real diversity is reflected in the width they have within their brand portfolio, segments, pricing positioning and retail solutions offered, whether this be online or offline. Their resilience has been shown through their ability to absorb any market challenge and grasp any additional benefit from these challenges, whilst they have always had the mind-set of growth, which has been highlighted in the group’s journey and expansion over the years.
As our time with Ahmed comes to a close, we ask him what the ethos of Baraka Retail Group is and what lies ahead for the business?
“Our ethos is to remain relevant and preserve growth patterns regardless of any market shifts. As for the greatest challenge, I would say this is the global supply chain crisis. We continue to work on solutions and tactics to adapt to the worst case scenarios and we remain positive about our future expansion and growth,” Ragab concludes.