Luxury powerhouse retailer Chalhoub Group continues its transformation under never-before-seen circumstances as it eyes a complete pandemic recovery by 2022.
Founded in 1955 and based in Dubai, the luxury retailer Chalhoub Group is moving forward with its e-commerce strategy and is expecting a full recovery as soon as 2022.
Almost ten per cent of its top executives; around eight per cent of the total workforce, have taken voluntary pay cuts that range from 20 per cent to 50 per cent to help aid the business in its time of need for the three months 1 April to 30 June, while Patrick Chalhoub has taken a full salary cut to assist the business during the crisis.
The effects of Covid-19 has accelerated Chalhoub’s push into e-commerce, where it saw sales jump to 20 per cent of the business in April, this is compared to just three per cent pre Covid-19.
Hand-in hand with the cost cuts and re-sizing the business over the coming months, the group will also invest in areas such as e-commerce, data and analytics, consumer experiences, staff training and innovative ideas, Chalhoub said.
For the past three years the group has been transforming from a traditional to a hybrid retailer with a wider online reach along with its physical stores.
“What has happened now with Covid-19 will only accelerate our plans and we should absolutely stick to our vision and make sure we realise it as fast as possible,” said Chief Executive of Chalhoub Group, Patrick Chalhoub. “We don’t have the time anymore to have resistance to our movement; we need to continue the drive, which means investing in our talent.”
The business is making some difficult choices in the short term in order to maintain its position and grow once again in the long term. The company is currently cutting costs and preserving cash as it restructures its business during this unprecedented pandemic.
Operating over 750 retail outlets across the Middle East with a portfolio of 300 brands that include Sephora, Louis Vuitton, Tod’s, Michael Kors, L’Occitane, Lacoste, Tory Burch, the family-owned business will close around a tenth of its portfolio in order to focus more on its remaining stores.
Chalhoub Group employs around 12,000 people and because of the difficult circumstances created by the coronavirus, will have to lay off 10 per cent of its staff. They are also asking employees to take a salary cut for the remaining six months of the year to assist in offsetting the declining revenue in this difficult year.
“It’s not an easy decision for a family business very attached to its people, whom we love and care for and who’ve done nothing wrong, but we need to compact our business at a time when business will contract, in order to protect not only the group but employees who are part of the group,” explains Chalhoub.
“We put a plan together to pass through these difficult months to come and at the same time continue building into the future. After deep assessment, we said we need to restructure, re-organise and resize ourselves to compact our organisation and our structure,” he said.
