DUBAI: Fawaz Abdulaziz Alhokair Co, the Saudi retailer which franchises brands such as Zara and Marks and Spencer in the kingdom, is studying 3-5 acquisition targets in the United States and United Kingdom, a company executive said yesterday.
The firm, the largest listed retailer on the Saudi stock market, also aims to sell its debut sukuk in the next 12 months.
Alhokair, which completed the purchase of Spanish clothing brand Blanco last month for ¤11m, was talking to respective parties but would only close deals if they were a right fit, Rob Cass, chief strategy officer, told reporters on the sidelines of a finance conference in Dubai. “We are looking at other opportunities, similar type brands that we believe have got the capabilities to grow,” Cass said, referring to Blanco.
Alhokair, which currently has 1885 stores across 20 markets predominantly in the Middle East and the CIS countries, is forecast to record sales of between SR5.5bn and SR5.7bn ($1.47-1.52bn) for the current financial year, with net profit in the range of SR760m-SR810m, Cass said. This would indicate a fourth-quarter profit of around SR180m-230m, based on the firm’s nine-month results, up from SR136m in the prior-year period.
At the current rate, the business was opening a new store every 18 hours, Cass said, with the firm planning to open 404 stores globally in the next financial year.
Of these, around half will be in Saudi Arabia, with 42 in the United States and 24 in Egypt. The company also aims to open 45 stores for its new INC value brand, with around 30 Blanco stores outside of Spain across Alhokair’s geographical footprint.
Alhokair is planning to sell its maiden sukuk in the next financial year and has mandated banks to arrange the transaction, Cass said, declining to name which lenders had been picked.
Saudi firms are turning to sukuk market for their financing needs as they look to diversify their funding sources away from traditional bank finance. Reuters
