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Adapting to evolving market landscape, Magrabi reports double-digit growth

Magrabi Retail Group, one of the region’s leading optical retail chains, has outlined a roadmap for 2024 containing strategic priorities and initiatives to build upon the successes of the previous year. (Supplied)
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Updated 02 April 2024
Reina Takla
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Adapting to evolving market landscape, Magrabi reports double-digit growth

  • Retail group is committed to investing in data capability, digital transformation
Updated 02 April 2024
Reina Takla

RIYADH: One of the region’s leading optical retail chains, Magrabi Retail Group, reported double-digit growth in 2023, highlighting its adaptability in a rapidly evolving market landscape.

The company witnessed a 15 percent surge in total sales compared to the previous year, and a 30 percent increase in like-for-like sales under its Doctor M banner, surpassing previous expectations.

Yasser Taher, the company’s CEO attributed this growth to the expansion and development of the group’s property portfolio. 

“We opened new stores for both our luxury banner Magrabi and the lifestyle banner Doctor M, including refurbishments, upgrades, and strategic store relocations,” Taher told Arab News. 

This strategic expansion not only enhanced the group’s market presence but also contributed to higher average order values and increased foot traffic.

Digital dominance

In addition to its physical footprint, the group has made significant strides in the digital sphere, experiencing a 225 percent growth in online sales in 2023.

This growth can be attributed to its focus on enhancing the online customer experience through various initiatives, including virtual try-on features and swift delivery enhancements such as same-day delivery.

Taher highlighted the enhancements made to last-mile delivery services, including the introduction of same-day and express options within 90 minutes in the UAE. 

These initiatives reduced delivery times and helped meet the evolving expectations of customers in an increasingly digital landscape. 

The executive emphasized the importance of removing service frictions, adding: “Our focus in 2023 centered on enhancing the end-to-end customer experience and removing service frictions.” 

Taher went on: “These improvements boosted our conversion rate, and we intend to continue this trajectory in 2024.”

He also revealed the approach taken to address key gaps and introduce innovative features.

“We identified and addressed 52 gaps, improved website content quality, and introduced features like virtual try-on,” Taher disclosed.

Strategic investments

In 2023, the group invested SR115 million ($30.66 million) in new store openings, refurbishments, and transformation projects, laying a foundation for future growth and scalability.

Outlining the strategic rationale behind these investments, Taher stated: “Expanding our network by opening new stores significantly impacts our future top line. We are adding more stores in both banners and continuing to upgrade the Magrabi banner to a luxury one.”

He also disclosed the group’s strategy to introduce shipping services to Qatar, Egypt, and Kuwait and adopt a new approach, transitioning from cross-border shipping to establishing local hubs in each target country. 

Our focus in 2023 centered on enhancing the end-to-end customer experience and removing service frictions.

Yasser Taher, Magrabi Retail Group CEO

“Egypt has been live since January 2024, with the creation of a fulfillment center. We are now preparing for Kuwait and Qatar, expected to be operational by September 2024. This expansion is integral to our growth in 2025, providing convenience and an omnichannel experience to our customers. It’s transforming the customer experience, adding depth to our relationships, and enhancing convenience for our customers.”

Looking ahead

The retail group has outlined a roadmap for 2024 containing strategic priorities and initiatives to build upon the successes of the previous year.

“In 2024, our primary focus is on marketing and communications,” Taher affirmed. The group aims to reinforce its position as the leader in luxury eyewear retailing through targeted campaigns and brand positioning strategies.

The executive also underscored the importance of continued investment in brand evolution and expansion initiatives. 

“We’re directing our attention to a second campaign for Doctor M, launching Concept 3.0,” Taher said. 

This milestone marks a pivotal moment for the Doctor M brand, with the rollout of new stores and enhanced customer experiences.

In addition to marketing and brand initiatives, Taher places a strong emphasis on operational excellence. 

“Operationally, we’re prioritizing CRM (customer relationship management)  activations and clienteling,” Taher explained, highlighting the importance of personalized customer experiences and relationship management. 

By leveraging data-driven insights and technology solutions, the Group aims to enhance customer engagement and drive repeat business. 

Furthermore, Magrabi Retail Group is committed to investing in data capability and digital transformation, including a substantial project on supply chain end-to-end optimization. By optimizing processes and leveraging technology, the Group seeks to enhance efficiency and agility across its operations, ultimately delivering greater value to customers.

As part of its strategic vision for 2024, the group has initiated an environmental, social, and governance strategy and framework development. “Furthermore, we’ve initiated our ESG strategy and framework development, which we plan to communicate in Q4 this year,” Taher disclosed.

New leadership

Taher, the first non-family CEO of Magrabi Retail Group, discussed the implementation of key improvements to the company’s overall strategy. 

These changes included the establishment of a new board of directors aimed at elevating corporate governance standards within the organization.

“The significant change we’re implementing on the board is majority independent and equal voting decisions, creating best-in-class corporate governance,” stated Taher.

This restructuring underscores the company’s commitment to fostering transparency and accountability at all levels.

The revamped board structure has already shown promising results, with Taher noting the implementation of thorough reporting mechanisms and structured board agendas. 

“The disciplined approach and active board engagement support strategy formulation and mitigate risk,” Taher remarked, highlighting the board’s role in identifying potential blind spots and driving overall growth.

In 1981, Magrabi Optical opened its first store in Jeddah and since then it has expanded across Saudi Arabia, Egypt, and Kuwait, as well as Qatar and the UAE. 

This expansion made it one of the largest eyewear and sunglasses retail chains in the Middle East and North Africa.

The group has also set ground-breaking targets for gender equality and fair practices, including the ambitious goal of 50:50 gender equality throughout, from board to shop floor, by 2025.

The company is already making huge strides forward in this regard, with the executive team, senior leadership team, and board already gender-balanced.

Topics: Magrabi Magrabi Retail Group

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Closing Bell: Saudi main index slips to close at 11,849

Updated 22 December 2024
REEM WALID 
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Closing Bell: Saudi main index slips to close at 11,849

  • Parallel market Nomu lost 205.92 points, or 0.65%, to close at 31,238.29
  • MSCI Tadawul Index shed 4.86 points, or 0.33%, to close at 1,484.56
Updated 22 December 2024
REEM WALID 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 43.07 points, or 0.36 percent, to close at 11,849.37.

The total trading turnover of the benchmark index was SR4.14 billion ($1.1 million), as 84 of the stocks advanced and 137 retreated. 

The Kingdom’s parallel market Nomu lost 205.92 points, or 0.65 percent, to close at 31,238.29. This comes as 37 of the listed stocks advanced while 49 retreated. 

The MSCI Tadawul Index also lost 4.86 points, or 0.33 percent, to close at 1,484.56. 

The best-performing stock of the day was Saudi Vitrified Clay Pipes Co., whose share price surged 9.89 percent to SR38.90. 

Other top performers included SHL Finance Co., whose share price rose 6.43 percent to SR18.20, as well as Taiba Investments Co., whose share price surged 4.97 percent to SR39.05.

Riyadh Cables Group Co. recorded the biggest drop, falling 6.30 percent to SR136.80.

Al Hassan Ghazi Ibrahim Shaker Co. saw its stock prices fall 5.15 percent to SR26.70.

Dr. Sulaiman Al Habib Medical Services Group also saw its stock prices decline 4.02 percent to SR286.60.

Meanwhile, Al-Baha Investment and Development Co. has announced moving its headquarters to Riyadh.

The company’s shares will be suspended for two business days starting Dec. 22, following the board of directors’ recommendation to reduce capital by 26.5 percent from SR 297 million to SR 218.3 million during an extraordinary general meeting held on Dec. 19.

The National Agricultural Development Co. has announced the release of its Sustainability and Environmental, Social, and Governance report.

According to a Tadawul statement, it outlines the company’s approach to embedding sustainability criteria within its strategic direction and operations as well. It reflects the firm’s commitment to its ESG responsibilities along with its devotion to sustainable development objectives in line with the Global Reporting Initiative standards. 

NADEC’s strategy complements the requirements for economic growth, keeps pace with developments in the Kingdom, and aligns with Vision 2030, which emphasizes environmental sustainability and renewable energy as fundamental components of development.

The analysis further provides a comprehensive insight into NADEC’s sustainability initiatives and commitments for the year 2023. The statement also disclosed that NADEC will periodically issue reports to keep stakeholders informed of ongoing developments going forward.

NADEC ended the session at SR25.50, up 0.98 percent.

Alhasoob Co. has announced the termination of the non-binding memorandum of understanding to acquire all shares of Alkhorayef Printing Solutions Co. by issuing shares to its owner Alkhorayef Group Co. 

A bourse filing revealed that this comes without reaching an agreement between the two parties and without any obligation on either party.

Alhasoob Co. ended the session at SR64.20, down 3.07 percent.

Saudi Basic Industries Corporation has announced the board decision to distribute SR5.1 billion in interim cash dividends to shareholders for the second half of the year. 

According to a Tadawul statement, the total number of shares eligible for dividends amounted to 3 billion shares, with the dividend per share standing at SR1.70. The statement also revealed that the percentage of dividend to the share par value stood at 17 percent.

SABIC ended the session at SR67.00, up 0.30 percent.

Topics: Closing Bell Tadawul MSCI Tadawul Index TASI Saudi Stock Exchange (Tadawul) Saudi stock market Tadawul All Share Index (TASI)

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Saudi Arabia accelerates digital transformation with new transport initiatives

Updated 30 min 7 sec ago
Nour El-Shaeri
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Saudi Arabia accelerates digital transformation with new transport initiatives

  • Aim to increase the transport and logistics sector’s contribution to Kingdom’s GDP from 6% in 2021 to 10% by 2030
  • Strategy envisions increasing air freight capacity to over 4.5 million tonnes annually
Updated 30 min 7 sec ago
Nour El-Shaeri

RIYADH: Saudi Arabia’s Ministry of Transport and Logistics has taken a significant step forward in its digital transformation with the launch of a new Digitalization and Technical Processing Center, alongside the unveiling of the Unified Documents and Records Platform.

These initiatives were announced by Minister of Transport and Logistics Services Saleh Al-Jasser during a ceremony attended by senior officials and industry leaders, as reported by the Saudi Press Agency.

The new center and platform are part of the ministry’s broader strategy to accelerate digitalization in line with the National Transport and Logistics Strategy and Vision 2030 goals.

A primary aim of these efforts is to increase the transport and logistics sector’s contribution to Saudi Arabia’s gross domestic product from 6 percent in 2021 to 10 percent by 2030. This would generate an additional SR45 billion ($11.9 billion) in non-oil revenues annually.

To achieve these goals, the NTLS prioritizes infrastructure development and operational improvements. Key plans include expanding the railway network by approximately 8,080 km, which features the 1,300 km “land bridge” project, and enhancing port infrastructure to accommodate over 40 million containers annually.

The strategy envisions increasing air freight capacity to over 4.5 million tonnes annually, as well as expanding international flight destinations to over 250.

Improving service quality and safety is another critical focus. The NTLS aims to position Saudi Arabia among the top 10 countries in the Logistics Performance Index and secure 6th place in the Road Infrastructure Quality Index. It also seeks to reduce road traffic accidents and fatalities by over 50 percent and cut fuel consumption in the transport sector by 25 percent.

In conjunction with the digitalization efforts, the ministry also inaugurated a historical exhibition that highlights key documents, photographs, and equipment used throughout the history of Saudi Arabia’s transport sector.

The exhibition also includes specialized laboratories for document restoration and sterilization, as well as a centralized destruction center to safeguard the security and confidentiality of information.

Bandar Al-Roqi, general supervisor of the ministry’s Document and Archive Center, emphasized the collaborative nature of the project, acknowledging the contributions of various ministry departments in its successful realization.

The project reflects the ministry’s commitment to integrating modern technologies to drive digital transformation while preserving the country’s transport history.

Topics: SaudiVision 2030

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Saudi flyadeal records lowest complaint in November, 99% resolution rate: GACA
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Saudi flyadeal records lowest complaint in November, 99% resolution rate: GACA

Updated 22 December 2024
REEM WALID 
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Saudi flyadeal records lowest complaint in November, 99% resolution rate: GACA

  • flynas was second, with 12 complaints per 100,000 travelers and a resolution rate of 100%
  • Saudia was third, with 13 complaints per 100,000 passengers and a resolution rate of 99%
Updated 22 December 2024
REEM WALID 

RIYADH: Saudi low-cost airline flyadeal recorded the fewest complaints among its competitors in November, with just 11 per 100,000 travelers, and achieved a 99 percent resolution rate, a recent report revealed.

Issued by the Kingdom’s General Authority of Civil Aviation, the classification index for air transport service providers and airports is designed to inform passengers about performance, helping them make more informed decisions.

Low-cost carrier flynas was second, with 12 complaints per 100,000 travelers and a resolution rate of 100 percent, and Saudia was third, with 13 complaints per 100,000 passengers and a resolution rate of 99 percent. 

Saudi Arabia’s aviation sector is rapidly growing as the nation aims to become a regional hub and major tourist destination. Through the Saudi Aviation Strategy, which opens the sector to global investors, streamlines licensing, and promotes competition, over $100 billion in aviation investment is being attracted to support the Kingdom’s Vision 2030’s goals.

The report is in line with GACA’s efforts to promote transparency, demonstrate its credibility and keenness to deal with travelers’ complaints, stimulate fair competition, and develop and improve services.

The figures from the analysis also align well with the National Aviation Strategy by the Kingdom, which aims to increase the air passenger throughput more than three-fold to 330 million by 2030.

The GACA data further revealed that despite serving over 6 million annual passengers, King Khalid International Airport in Riyadh had 13 complaints, a low rate of 0.4 percent per 100,000 passengers, and a 100 percent resolution record.

Prince Sultan Bin Abdulaziz International Airport, with nearly 6 million annual passengers, also had a complaint rate of 0.4 percent per 100,000 passengers and a 100 percent resolution rate.

King Saud Airport had the lowest complaints among domestic airports, with a rate of 3 percent per 100,000 passengers and a 100 percent resolution rate.

The most common complaints in November were related to luggage, flights, and tickets.

According to the 2024 State of Aviation Report by GACA, a key measure of the aviation sector’s success is the 7 percent growth in air cargo, reaching 900,000 tonnes, alongside a record-breaking 112 million passengers in 2023.

This passenger volume was surpassed by a 17 percent increase in the first half of 2024, with the number of flights growing by 12 percent compared to the same period last year, reaching 815,000.

Topics: Saudi Arabia flyadeal Travel Saudi aviation Saudi General Authority of Civil Aviation (GACA)

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Six initiatives unveiled to strengthen Saudi-Yemeni economic ties

Updated 28 min 31 sec ago
Miguel Hadchity
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Six initiatives unveiled to strengthen Saudi-Yemeni economic ties

  • Initiatives were unveiled during a joint council meeting held in Makkah
  • Council has proposed upgrading the infrastructure at border crossings between the two countries
Updated 28 min 31 sec ago
Miguel Hadchity

RIYADH: The Saudi-Yemeni Business Council has announced six key initiatives aimed at enhancing trade and investment ties between Saudi Arabia and Yemen, while also supporting Yemen’s ongoing economic development.

The initiatives were unveiled during a joint council meeting held in Makkah on Sunday, attended by over 300 Saudi and Yemeni investors, according to Al-Ekhbariya.

Abdullah bin Mahfouz, chairman of the Saudi-Yemeni Business Council, which is part of the Federation of Saudi Chambers, disclosed that agreements had been made to establish three new Saudi-Yemeni companies.

The first company will focus on renewable energy, with an initial capital investment of $100 million, to generate solar-powered electricity for Yemen.

The second venture will operate in telecommunications, utilizing Starlink satellite networks. The third company will organize exhibitions and conferences in Yemen to promote Saudi products and support the country’s reconstruction efforts, as reported by the Saudi state-owned channel.

In addition to these initiatives, the council has proposed upgrading the infrastructure at border crossings between the two countries, improving logistics services to facilitate smoother trade.

The trade volume between Saudi Arabia and Yemen currently stands at SR6.3 billion ($1.6 billion), with Yemeni imports from Saudi Arabia accounting for just SR655 million. However, sectors such as mining, agriculture, livestock, and fisheries in Yemen remain largely underdeveloped and present significant growth opportunities.

Among the key recommendations is the establishment of quarantine centers to inspect Yemeni livestock, agricultural products, and seafood, aimed at increasing Yemen’s exports to Saudi Arabia. There are also plans to create “smart food cities” in border regions to bolster food security and promote sustainable agricultural practices through advanced resource management and technology.

Addressing banking and credit challenges is another priority. The council has called for improvements to Yemen’s banking infrastructure, including better collaboration with Saudi banks and the development of Yemen’s exchange sector, to facilitate smoother financial transactions for traders from both countries.

A significant proposal also includes the creation of a Yemeni Investors Club in Saudi Arabia, designed to encourage joint investments and foster business partnerships between the two nations.

Abdulmajid Al-Saadi, co-chairman of the Yemeni Business Council, commended Saudi Arabia’s recent reforms in investment regulations, highlighting that Yemeni capital, estimated at SR18 billion, has increasingly been channeled into Saudi markets. This places Yemen third among foreign investors in the Kingdom.

For over 23 years, the Saudi-Yemeni Business Council has played a pivotal role in fostering economic relations between the two countries, organizing forums, identifying trade and investment opportunities, and promoting bilateral business exchanges. The targeted sectors for cooperation include renewable energy, agriculture, livestock, telecommunications, and trade development, in line with regional and global food security challenges.

In 2023, trade between Saudi Arabia and Yemen amounted to SR6.2 billion, with Saudi exports totaling SR5.6 billion, which included dairy products, fuels, and vegetables. Yemeni imports from Saudi Arabia reached SR661.9 million, consisting of fruits, seafood, and printed materials.

Saudi Arabia has provided significant financial support to Yemen over the past few decades, including over $50 billion in funding for central bank deposits, government budgets, and development projects.

Topics: Saudi Arabia Yemen

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Riyadh leads Saudi real estate surge with 20.8% rise in office rents

Updated 22 min 47 sec ago
Nirmal Narayanan
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Riyadh leads Saudi real estate surge with 20.8% rise in office rents

  • Report attributes rise in office rents to the Kingdom’s economic diversification efforts
  • Capital remains an attractive destination for businesses and investors
Updated 22 min 47 sec ago
Nirmal Narayanan

RIYADH: The real estate market in Riyadh is experiencing significant growth, with rents for Grade A office spaces rising 20.8 percent year on year in the third quarter of 2024, reaching SR2,131 ($567.31) per sq. meter.

This increase reflects the city’s expanding economic activity, driven by both a thriving private sector and ongoing government initiatives aimed at positioning the capital as a global business and investment hub.

According to JLL’s latest market analysis, this surge in demand for high-quality office spaces is contributing to a historic low in vacancy rates, which fell to just 1.6 percent in Q3 2024.

The report attributes the rise in office rents to the Kingdom’s economic diversification efforts, particularly the continued growth of the private sector in Riyadh.

The city remains an attractive destination for businesses and investors, with strong demand for Grade A office space in key districts.

JLL also highlighted that Northern Riyadh, with its superior accessibility and high-quality developments, is increasingly favored by occupiers, driven by the area's efficient workspaces and ample parking, which help mitigate rising traffic congestion.

In Jeddah, Grade A office rents rose by 11.6 percent year on year, reaching SR1,338 per sq. meter, with a low vacancy rate of 3.7 percent. These trends reflect broader market strength across Saudi Arabia’s key cities.

Hospitality sector thrives

Saudi Arabia’s hospitality sector continues to see impressive growth, fueled by a combination of high-profile events and the Kingdom’s expanding tourism infrastructure. With events like Riyadh Season and AlUla Season drawing millions of visitors, coupled with the ongoing development of urban infrastructure, the Kingdom is solidifying its status as a leading global leisure and business destination.

According to the Ministry of Tourism, Saudi Arabia’s leisure tourism has skyrocketed by 656 percent since 2019, with 17.5 million international visitors arriving in the first seven months of 2024 alone.

This boom in tourism, supported by initiatives such as the streamlined tourist visa system and a growing entertainment sector, has boosted the Kingdom’s appeal as a global leisure destination.

Saudi Arabia has already surpassed its original Vision 2030 target of attracting 100 million visitors and is now aiming for 150 million by 2030.

“The hospitality sector is set for continued expansion, driven by a packed events calendar and a steady influx of religious tourists,” said Saud Al-Sulaimani, country head of JLL Saudi Arabia. “These factors will fuel demand for accommodations and enhance occupancy rates in key cities.”

In Riyadh, the average daily rate for hotels increased by 19 percent year on year in Q3 2024, reaching SR736.3, while revenue per available room saw a 17.1 percent rise to SR440.3.

Despite a minor dip in occupancy by 1.2 percentage points, these metrics reflect the growing strength of the hospitality sector. Jeddah, on the other hand, saw a 10.3 percent year-on-year decline in RevPAR, attributed to a 12.1 percent drop in ADR, although occupancy rates rose by 1.4 percentage points.

Makkah and Madinah presented mixed trends, with RevPAR declining by 2.9 percent in Makkah, while Madinah saw a slight increase of 1.6 percent.

“Performance metrics in the hospitality sector are expected to improve as we approach the year's end, fueled by key events like the Riyadh and AlUla Seasons, as well as continued religious tourism,” JLL added.

Residential market growth

The residential markets in Riyadh and Jeddah also saw strong performance in the third quarter of 2024, driven by strong demand and shifting buyer preferences.

In Riyadh, 4,000 new residential units were added in Q3, bringing the total stock to 1.46 million. Jeddah saw even greater growth, with 8,000 new units delivered, increasing its stock to 899,000 units.

Residential property prices in both cities also saw significant increases, with Riyadh experiencing a 12 percent year-on-year rise in sales prices, while Jeddah saw a 6 percent increase.

“This is an exciting time for Saudi Arabia, with unprecedented growth across multiple sectors,” said Al-Sulaimani. “The combination of soaring tourism numbers, rising hospitality revenues, and strong demand for residential properties is creating a dynamic environment that presents immense opportunities for investors and businesses alike.”

He added: “The Kingdom’s commitment to diversifying its economy is evident, and we are excited to see how these developments will shape our future.”

Topics: real estate Riyadh office tourism

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