Dubai’s Damas eyes expansions in Saudi Arabia

Dubai-based jeweler Damas is preparing to expand its operations in Saudi Arabia, despite a slowing demand for gold jewelry in the region.

The company currently has stores in key Saudi cities, such as Jeddah, Madina, Makkah, Riyadh, and Khobar with a total of 300 stores in the Middle East.

“In the last 18 months we opened 20 stores taking us to 34 stores with the plan to open 20 more by mid-2017,” chief executive officer Anan Fakhreddin told Argaam.   

“However, now we're casting a wider net with new focus cities including Yanbu, Tayef and Jubail, totaling over 50 stores across the kingdom,” said Fakhreddin.

Damas, meanwhile, shrugs off competition risks from popular Saudi retailers like Fitaihi and L'azurde.

“Our positioning in Saudi Arabia is very strong, as we have been here for a very long time. We fully understand the tastes and needs of our GCC customers,” the CEO said.

The jewelry group also plans to launch more international brands in the country, such as the newly opened Graff store at Riyadh’s Kingdom Center mall.

The expansion comes at a time when consumer spending in the kingdom has been declining due to government imposed spending cuts in response to low oil prices and the impact of higher energy and water prices on individual budgets.

Demand for gold jewelry in the Middle East region has also declined 10 percent year-on-year to 56.5 tonnes due to the higher prices, according to the World Gold Council global. In Saudi Arabia demand fell 12 percent to 15.3 tonnes in Q1-2016, compared to the same quarter in 2015.

Write to Brinda Darasha at brinda.d@argaamplus.com