Debenhams expands into Pakistan

The British retail chain Debenhams has opened its first department store in Pakistan as part of a major expansion of its brand worldwide.

The company has signed a franchise agreement with Team A Ventures, a local company that already representsother British retailers.

The store in Pakistan opened in Dolmen Mall, Karachi, last week and is to have a grand opening on August 2.

“There’s a highly affluent middle class, which is growing in Pakistan, and we have also got a strong franchise partner,” said Lucy Haine, the senior business manager at Debenhams International.

Like many of its peers, Debenhams is focusing heavily on expanding abroad as growth in the United Kingdom remains stagnant amid government austerity measures and recession.

The department store is performing better than some of its peers and maintained growth of 0.3 per cent in like-for-like sales in the six months to March.

Debenhamshas risen nearly 50 per cent on the London Stock Exchange so far this year.

Ms Haine said the retailer would look to expand into other Pakistani cities, such as Lahore and Islamabad, if the opportunity to lease store sites arose.

Debenhams is also opening its first store in Russia in September and last week said it would launch an online delivery website in Germany.

It can now deliver to 14 countries, including the United States, Argentina, Costa Rica, Israel, Kenya, Singapore and Venezuela and will eventually add 34 countries.

“International is a growing part of our business,” said Ms Haine. “We are always looking for new sites.”

Debenhams has 153 stores in the UK and Ireland and 69 stores in 25 other countries.

In the Middle East, Debenhams is managed by MH Alshaya, one of the biggest retailers in the region, which operates more than 20 Debenhams stores in the UAE, Saudi Arabia, Bahrain, Qatar, Jordan, Egypt and Turkey.

In Pakistan, Team A Ventures is a well-established operator and distributor of international brands, including Mothercare, Next, Early Learning Centre, Accessorize, Timberland, Crocs and Monsoon. “That was an important factor for us in choosing a franchise partner,” said Ms Haine.

Pakistan has a population of about 170 million and although the GDP per capita is only $1,200, retailers believe there is a huge opportunity on the basis of the small part of the population that is growing in affluence. The international professional services company Deloitte last year cited Pakistan in a report on countries that were potentially lucrative markets for retailers, titled Hidden heroes: the next generation of retail markets.

“The fashion market has been expanding for the last four to five years and there are strong local brands in the market,” said Adnan Hamid, the general manager of Debenhams in Pakistan. “There are so many people travelling from Pakistan to the UK. There are people coming into the store saying, ‘We used to go to the UK or Dubai to shop in Debenhams.'”

The department store in Karachi will be branded the same as Debenhams in the UK and sell the same products, a mix of 100 designer and own-branded goods.

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