LIWA stresses the importance of transparency
Abu-Dhabi based retail group, LIWA Trading Enterprises’ CEO, Mark Tesseyman emphasises the importance of dialogue between franchisor and franchisee to understand and bear each other’s pain.
LIWA Trading Enterprises holds the rights for several fashion & lifestyle brands in the Middle East, including GANT, OVS, Marwa, Zippy, Celio, La Senza, Aspinal of London and Lovisa to name a few.
“The key here is honesty and transparency because only if we can understand the problem, we will be able to plan accordingly. We have had some deferred royalties, for example, provided we pay for goods. One could argue that this is a shared benefit,” observes Tesseyman.
Like several businesses around the world, LIWA has also had to temporarily close its stores across the Middle East, since most of the
GCC governments decided to close shopping malls for a minimum period of two weeks, which could be renewable.
Shopping mall operators, considering the economic stress, have announced relief and stimulus packages to support retail tenants. In this context, Tesseyman cautions, “While any rent relief and stimulus by landlords is welcome, it also need to be proportionate to already granted incentives. Many large groups already have huge incentives in place, and those should be considered.
If mid and smaller groups are not supported to survive, many brands may disappear from certain malls entirely. That will create a very bland landscape with no differentiation from one mall to another.”
To offset the losses from brickand-mortar stores, several brands in the world and the region are banking on their e-commerce arm. LIWA is also actively looking at rolling out its e-commerce arm sooner than planned while building its brands’ presence through online marketplaces and pure play. “The issue is the speed of response, especially if using thirdparty support,” Tesseyman points out.
From product availability point of view, especially in fashion and lifestyle, the supply chain has been impacted. Tesseyman agrees that half their brands are facing supply chain issues to varying degrees.
“This has already begun to manifest itself, depending on the countries of origin. If sourcing is from Asia, then disrupted supplies began almost a month ago. It will continue to evolve as companies switch supplier bases if they think it is appropriate.”
Commenting on business-critical and humanistic steps that LIWA has undertaken as a responsible business, Tesseyman says, “We have approached this from the principle of risk. Our first piece of guidance was to all our colleagues so that they understood where we stand on all matters related to the current situation. Their safety and welfare are our primary concern; policy matters, therefore, need to be clear. We have had to initiate a deferred payment structure, but not a permanent reduction. Importantly, there have been no layoffs. Also, we are complying with all the guidance coming from the respective authorities.”
“From the business point of view, we have written to all vendors and suppliers seeking clarity on their position and stating our own so that there is no ambiguity in any discussions regarding relief and more,” he adds.
Given that this is a global crisis when asked how LIWA is strategising to stay as profitable as possible, Tesseyman says, “Our strategic plans have not changed. If they were correctly conceived before these issues, they are still relevant. We are adapting some timescales, but many of those issues are beyond our control. We are controlling our costs as a natural course of events. There will be some significant upside post this period, and with the correct strategies in place, we need to be in a position to optimise development.”