JEDDAH — With 85 stores in 16 cities across the Kingdom and plans to reach 100 stores within 2015, Giordano Middle East (FZE) clothing company has unexpectedly found in Saudi Arabia its largest and most successful market, said Ishwar Chugani, managing director of Giordano Middle East (FZE)and executive director of Giordano International.
Founded in Hong Kong in 1981, Giordano International is growing globally and represents today one of the world’s leading international apparel retailers for men, women and children.
The company operates 2,800 stores in 40 countries across all continents and looks with particular interest at emerging markets like Saudi Arabia, Iran, Pakistan, Sudan and Brazil to further exploit the brand’s growth potential.
In an interview with Saudi Gazette, Chugani explained how he managed in the last 20 years to expand the brand in the Middle East creating an important customer base in Saudi Arabia.
He described the company’s positive impact on some of the Kingdom’s crucial social challenges such as the “Saudization” and revealed the business model and strategy that transformed the brand as one of the key players in the apparel retail industry.
Set up in Dubai in 1993, explained Chugani, Giordano Middle East was among the first retail companies to enter the Saudi market in 1995.
During its 18-year presence in the market, the brand grew together with the country’s infrastructures, gradually moving its stores from the populated downtown areas to the first Saudi malls.
Initially targeting Filipino and Indian nationals, the brand increasingly gained a more variegated clientele.
Over the years, Chugani said, Giordano Middle East (FZE) had to face strong competition and market challenges but kept on expanding thanks to an intense sharing of information throughout Giordano’s international network, the tireless work of a passionate team that grew with the company and a culture of empowering employees and continuously renovating stores and collections.
Cultivating a company’s culture creates an attachment to the brand that is the ultimate competitive advantage no one can steal,” he said.
This is the kind of culture and approach Chugani aims at spreading also among Saudi employees that represent 35 percent of Giordano’s workforce with a view to increase this figure to 50 percent.
“For many years business owners have been looking at hiring Saudis just in terms of numbers and norms compliance,” he said.
“At Giordano, we would like to encourage a change in the current mind set,” said Chugani. Companies and government should work together in building a culture of service and make young Saudis understand that working doesn’t mean making a favor to someone but being part of a team in which they all need each other.
Intense training, the prospect of a career growth and stores’ management are some of the incentives pointed out by Chugani to achieve this goal.
Talking more in general about strategies young Saudis should follow to express their talent, Chugani decided to share his formula to succeed in life.
“Always think of the “3 H.” Use your Heart (Love what you are doing), Hands (work hard), and Head (use your common sense and best judgment at all times).”
Licensed by the Saudi Arabian General Investment Authority (SAGIA), Giordano is quickly expanding in Saudi Arabia and the region by promoting an essential and timeless fashion for all and using a simple and flexible business model that allows rapid reactions to market changes.
Just like elephants, explained Chugani, certain companies are big and loud but also very slow. Others, like Giordano, are fast and flexible like monkeys. Giordano can open new branches quickly thanks to a simple and proven business model based on franchising the brand without heavy protocols or layers of management.
In the last three years the Kingdom has become Giordano’s largest market also thanks to the company’s variety of products and styles and efforts to adapt global trends to the specific needs and tastes of the Saudis.
In Saudi Arabia, said Chugani, Giordano is mainly a men’s brand but we also have products for women and try to offer an affordable and quality fashion for everyone through our four brands: “Giordano”, “Concept One”, “Giordano Junior” and “BSX”.
The company uses natural fabrics like linen and cotton and likes to continuously experiment new colors and fits following customers’ needs rather than trends, he said, adding, “In the Kingdom, we are realizing that there is great potential for items related to Saudi culture and we are trying to involve young Saudi designers in creating local and original designs for our BSX collection.”
Customer care and social responsibility are, in Chugani’s opinion, two other essential elements to succeed.”Customers rarely buy from a company. They buy from a knowledgeable person that they trust and deliver what is promised.
“Besides, everyone can sell t-shirts but, especially since the explosion of social media, people are also eager to know if a company is responsible toward the society it conducts business in.
“Apart from introducing environmental bags and an energy-efficient lighting of its stores, Giordano engages in various social initiatives and competitions to raise funds for charity organizations.”
After making general considerations on the retail industry and highlighting how its growth in the region runs parallel to the construction of new malls and economic cities, Chugani concluded his interview focusing on social media.
“Online platforms like Facebook and Twitter are playing an important role in helping companies to cultivate customers’ trust.
Although their capacity to complement store sales is still limited, we expect to raise the percentage of online shopping in the UAE from three to 10 percent in the next few years and start introducing soon the same system in Saudi Arabia,” he said.
Following are excerpts from the interview
Saudi Gazette: Can you tell us something more about the history and achievements of the Giordano Group and the philosophy that contributed to its success?
Ishwar Chugani: The pillars of success for Giordano are rooted on its Quality, Knowledge, Innovation, Service and Simplicity (Q.K.I.S.S.). Additionally, our global success is also due to the fact that we target all categories of people from different groups and backgrounds.
Our collections offer timeless and relevant apparel that is easy to mix and match and is readily available at various convenient store locations.
The knowledgeable and friendly service we extend to our customers is also well appreciated which is why we find many of our customers coming back to our stores.
Giordano’s global success story has been featured as a case study at the Harvard Business School. The company has also received international recognition for its commitment to corporate governance.
Saudi Gazette: You have recognized the merit of having played an integral role in the growth of Giordano in the Middle East. What’s the secret behind your success?
Ishwar Chugani: There really is no magic formula to my leadership at Giordano. Everyone here takes ownership of the brand and company. We encourage our staff to consider it as their own business so they essentially work for themselves and not just a company. Giordano also has a policy of looking after the career growth of its employees and you will find that we have employees who have been with the company for almost 20 years. Most of our employees are promoted from within, rising from the ranks. Giordano believes that someone who knows how to run the floor as a sales staff would be the best manager to oversee the store. In running the business, we make sure our process is simple and not bureaucratic. By doing so, we save time and resources and are thus, more efficient in carrying out our duties.
Saudi Gazette: Can you talk about your personal experience in the retail industry and your marketing strategy?
Ishwar Chugani: I used to be extremely hands on, very meticulous, and was involved in all matters related to the day-to-day operations of the company. I would visit stores and look for the smallest detail. I was too operational in my thinking. I was micro-managing and getting myself involved in all areas of the business. As the business grew, I realized that I needed to step back, delegate and empower my team to take decisions. This gave me time to focus on our strategy and growth. Stepping back from day-to-day operations enabled my team to become more responsible and accountable.
Giordano’s strategy of “less is more” means we focus on the essentials – which provide the right product mix and choices for our customers who are assured of a collection that is essential, relevant and of superior workmanship. Moreover, we continuously invest in our people who are our brand ambassadors. They represent the company and are trusted by our customers. It is our observation that customers come back because they trust the person they deal with.
In addition to this, we have set ourselves an ambitious expansion plan to open another 50 stores in the region and India by the end of 2015. The new Logistics and Distribution Center that we are setting up in Jebel Ali will be operational from mid- 2013 and this will provide strategic support, logistics and management to Giordano’s franchise partners across the region and will also be responsible for Giordano’s expansion and franchising outside Asia.
Saudi Gazette: How many Giordano stores are there in the Middle East, Gulf and Saudi Arabia? What are the brand’s achievements and development plans in the Kingdom?
Ishwar Chugani: Currently, the Giordano group operates over 2,800 stores in 40 countries across Asia, Australia, Africa, Canada, Central America, Eastern Europe, Central Asia and the Middle East. In the Middle East and Africa, including India and Pakistan, we operate 240 stores with 85 located in Saudi Arabia. We just opened our 85th store in Jeddah, on Tahlia St. It is one of our best stores with unique colors and a wood-textured theme inspired by Hong Kong/Korean concept stores. Five new stores were signed and scheduled to open before Ramadan while ten stores will undergo upgrades.
Saudi Gazette: Can you describe Giordano’s product range, current collections and new trends? In what ways do you combine style with easy-to-wear fashion that suits contemporary lifestyles?
Ishwar Chugani: Giordano is known for simplicity and styles that are timeless, classic and easy to mix and match. From casual to smart looks, the transition is always easy as you have the essential outfit. Our fabrics are of high quality and mostly 100 percent cotton which contributes to its wearability and durability. In fact, our innovative wrinkle-free fabric makes it ideal to be worn throughout the day, be it for a business event or a casual day.
Saudi Gazette: How does Giordano apply global trends to the specific needs, tastes and culture of Saudi clientele?
Ishwar Chugani: Giordano is a global brand that appeals to almost everyone. Even in Saudi Arabia, our clothes are well-accepted due to straight-forward, simple and no-nonsense styles. Our line is so basic and essential that sometimes all you need is to change accessories and you already have an updated look.
Saudi Gazette: Does your company house other international brands under its portfolio? If yes, can you mention some of them and define their impact on Giordano’s collection?
Ishwar Chugani: Apart from Giordano, we also have three brands – Concepts One, Giordano Junior and BSX – each with its own market positioning and retail identity.
Saudi Gazette: What is the percentage of Saudis hired within Giordano stores in the Kingdom? Does the company support the Kingdom in its attempts to reduce unemployment among nationals?
Ishwar Chugani: Giordano supports and is on track with the Saudization program. We have achieved 35 percent Saudization in our work force and have plans to further develop and promote more Saudis in middle management. In fact, some of our shops are wholly managed by Saudis. More than 50 percent of our Saudi staff has remained with the company for over five years.
Saudi Gazette: How does Giordano face fierce international competition?
Ishwar Chugani: There are many factors that have helped us succeed and distinguish ourselves from our competitors. Firstly, as a multicultural company, our audience is significantly varied, not only in terms of culture but also in social groups and genders. Secondly, Giordano places a lot of emphasis on offering customers the highest quality clothes, which is why most of our clothes are 100 percent natural fabrics. Lastly, we always ensure that we combine simplicity, which is one of our core values with flavor. In other words, although we offer simple and practical designs, we make sure we spice them up and adapt them to our customers’ tastes. We have our classics but we do adapt them to fit our consumers’ needs and wants. Having said that, I’d like to emphasize that we adapt our clothes according to what our customers want, not according to the current trend, as we believe that being fashionable does not automatically necessitate following the latest trends. I think that this is one of our values that strongly set us apart from other brands.
Saudi Gazette: Giordano brand is committed to creating a positive impact in the communities where it conducts business by supporting charity organizations and using environmentally friendly means to achieve its goals. Can you go into the specifics that are behind these initiatives and tell us why it is important for companies to be socially responsible?
Ishwar Chugani: Giordano is committed to being a successful and responsible corporate entity. This means it is committed to delivering quality products and quality services to its customers and maintaining a strong and sustained financial performance for its shareholders. It is also committed to creating a positive impact in the communities where it conducts business. It aims to achieve this by supporting charitable organizations and causes by ensuring that the workers are treated with fairness and respect and the company’s goals are achieved through environmentally friendly means.
Giordano’s Social Responsibility Statement is a simple and concise statement of its values, intentions and expectations. The statement serves as the foundation for it to monitor and improve on performance, keeping in mind changes in local laws and regulations, trade practices and their risk assessment. Last spring, Giordano Junior inspired kids to go green with its new collection that aims to inspire children to be more environmentally friendly.
The collection is designed to encourage kids to learn more about the “reduce, reuse and recycle” principles.
Giordano has adopted energy efficient lighting solutions in all of its stores since 2009.
Saudi Gazette: You are the director of the Retail Business Group in Dubai and have over 35 years of retail and marketing experience in the region. What are your views on the retail market? Is there growth of retail profit in the Gulf?
Ishwar Chugani: The GCC in particular provides an interesting challenge in that it is so diverse, with so many different nationalities. It is a mixture of people with varied tastes and outlooks. It is an intriguing place to do business while catering to such a wide spectrum of tastes. With the retail boom currently going on in the GCC, it has become a retailer’s paradise. The factors that aid retail expansion are continued growth of regional and international inbound tourism, growth of national populations and influx of expatriates. Another area of opportunity is the current infrastructure developments in the region which will also bring in more high net worth individuals and business, resulting in the increase of the overall population and buying power.
Saudi Gazette: Given your 35 years of experience in the retail industry, how would you describe customer behavior?
Ishwar Chugani: Customers look for someone they can trust. At Giordano, we listen closely and give what customers want. Our primary aim is to give you the best possible experience in our shop — whether that’s in purchasing an item, following up on an order, returning a merchandise or even raising complaints. From customer service, we have raised this practice to customer care, something which is paramount in our work philosophy because this is how we stay connected.Now, more than ever, we provide personal attention to customers. If a product is not available in store, Giordano staff will source it and have it delivered to the customer. Today’s customers do not just buy from a company, they buy from a person they like and trust and who is knowledgeable and delivers what is promised.
Saudi Gazette: What is the impact of social media and online shopping websites on Giordano’s sales in Saudi Arabia and the Gulf? Do these new technologies facilitate or increase sales?
Ishwar Chugani: Social media definitely brings brand awareness and recognition. It is a great tool to be in touch with your customers and know their behavior. For us, we get insights on their shopping or style preferences. As for online shopping, it’s still very much in the nascent stage but it helps in reaching out to customers. We are happy to announce that online shopping for Giordano will soon be available in Saudi Arabia.
Saudi Gazette: What kind of advice would you give to young Saudi entrepreneurs willing to succeed in the retailing industry?
Ishwar Chugani: A company’s culture is the ultimate competitive advantage. Competitors can steal your products or services or even key employees. However, they cannot steal a great company’s culture. As a leader, we have to encourage a continuous flow of communication across all levels, share our knowledge and most importantly, empower our employees to take decisions and grow — when they grow, we also grow. Remember to use your 3 H’s –your Heart (love what you are doing), Hands (work hard), and Head (use your common sense and best judgment at all times).
Source – Saudi Gazette