Interview with Anthony Chalhoub and Patrick Chalhoub, Co-CEOs of Chalhoub Group
The Chalhoub Group values family, professionalism, and sustainability. As one of the leading luxury retailers in the Middle East, the family-owned company knows a fair bit about overcoming adversity. After all, becoming a major player in beauty, fashion and gifts does not come easily. But decades of dealing with unsettling times and an unsettled region has seen the Chalhoub Group emerge triumphant.
With nothing but their entrepreneurial spirit and their excellent taste in luxury goods, Michel Chalhoub and his wife Widad started an incredible company 60 years ago that today employs more than 12,000 people. The couple found their mission in bringing Western luxury brands to the Middle East. They set the cornerstone to their venture by opening the first Christofle boutique in Damascus, Syria in 1955. As their business grew, so did their portfolio of brands and today the family’s name has become permanently linked to that of its partners Dior, Louis Vuitton, Christofle, Baccarat, Puig and many more.
Sixty years later, the Chalhoub Group is active in over 14 countries and manages a network of over 650 retail stores and over 125 companies, affiliates and joint ventures. The Chalhoub Group also invest vast resources in furthering industry knowledge, providing education for their employees and championing regional sustainability. The group, currently run by second generation brothers Anthony and Patrick Chalhoub, is one of the largest luxury retailers in the region and has made headlines by launching their own concept retail stores Tanagra, Level Shoe District, and soon TRYANO.
Tharawat met with Co-CEOs Anthony and Patrick at their Dubai headquarters, a superb white building that bears the family’s logo in dark blue strokes. With modesty, friendliness and a great deal of enthusiasm, the Chalhoub’s discussed their family business trajectory, sustainability in the luxury industry and why their people are their main asset.
Tumultuous History and Accelerated Growth
This year marks the 60th anniversary of the Chalhoub Group, a family business with a story to tell. Second generation brothers, Anthony and Patrick Chalhoub, are very aware of their parents’ achievement of building a legacy that stood the test of time and stands true to the family’s values. “If you look back at our history, you will find it to be one of constant adaptation and challenge,” explains Anthony, the eldest of the two brothers.
Michel and Widad Chalhoub, parents of Anthony and Patrick and founders of the business, had to move countries multiple times due to unforeseen conflicts and circumstances. They left Syria for Lebanon in the 1960s, later leaving Lebanon for Kuwait in 1975. The family settled in the U.A.E. in 1990. “We moved the business from Kuwait to the U.A.E. because of the war. It was a learning experience. We had to realign our priorities. We had to keep bouncing back and starting over.” Anthony adds, “It also required reinvention and continuous innovation, like a phoenix that keeps rising from the ashes.”
Now headquartered in Dubai, the family luxury business spans the entire Middle Eastern region as one of the most significant industry players. “We have invested in a great HQ building in the U.A.E. but continue to focus on the whole region,” says Patrick. “Looking back on our 60 years of existence, what makes us most proud is the fact that we have over 12,000 team members that all believe in our values. This is probably the result of our long-term thinking. We are not about immediate profits. We are after excellence and fostering entrepreneurial spirit. What makes our employees very proud is that they stand for something more, they belong to something bigger.”
Entrepreneurial Agility and Necessary Sacrifice
With over 650 retail stores across the region, the Group has come a long way from their beginnings as luxury good distributors. Both brothers agree that the survival and growth of their business is rooted in the family’s entrepreneurial spirit. The question is whether such a giant organisation is able to retain its here to proven agility. “It worries us. We feel the burden of responsibility for our employees and their families,” says Patrick. “But, we always operate outside of our comfort zone. Our teams are very qualified and competent so we are confident that we can deal with eventualities. We have proven this especially when times were difficult.”
True to their word, instead cutting back on costs during the economic slowdown in 2009, the company increased investment in their people and launched a retail academy for their employees. The Co-CEOs are both quick to admit that taking such risks as a family business is facilitated by the absence of outside shareholders that pressure the business for dividends. “On the other hand, in 2011 and 2012, we experienced very good years. But instead of relaxing we decided to do a stress test. We planned scenarios on how we would deal with unforeseeable circumstances. We don’t allow ourselves to get comfortable,” comments Patrick.
Despite the huge responsibility lying on their shoulders, both Patrick and Anthony are enthusiastic and relaxed when they talk about the business. But what about their own sacrifices? Anthony looks over the rim of his glasses with humorous eyes and says, “Our integration into the family business was a very natural process. We would help out during school holidays. I remember a time without computers, when we just had these huge calculators. Even back then, we lived the entrepreneurial values. We had lots to do and were always involved. It wasn’t a sacrifice, just a natural progression.”
Patrick underlines the excitement of being part of a family business that continuously progresses by reinventing itself and transforming its business model time and time again. “We transformed the business dramatically between the 1970s and 1990s. We had normal distribution relationships at the beginning, but we quickly moved on to becoming franchise partners. In 1983 we opened the first Louis Vuitton boutique in the Middle East in Kuwait. To further integrate with our partners, we began to build joint ventures such as the one with Puig in 1999 and Fendi in 2004. We are able to engage the principals behind the brands and work jointly on expansion. It suits our long-term outlook as a business and a partner of choice.”
Today the group’s activities are characterised by a variety of collaborative formats ranging from distribution to joint ventures. In 2012, concept store Level Shoe District opened in Dubai Mall. TRYANO, another Chalhoub Group-designed retail experience, will be launched in Abu Dhabi later this year. In a way, the concept stores are the clearest representation of the group’s motto: The customer comes first. “We are here to create an experience for the customer and to make our employees proud of the work they do,” says Patrick humbly.