Iran is emerging as a market that every retailer with international ambitions should be looking at, according to a senior Debenhams’ executive.
John Scott, Debenhams’ director of international business development, told delegates at Retail Week’s International Expansion conference today that the Middle Eastern country has been a “massively successful” venture for the department store chain.
Debenhams launched in Iran six years ago and has five stores in the country through franchise partnerships. It has plans to double the footprint in one of its Iranian stores to around 70,000 sqft.
“If the trajectory moves forward as it should, it [Iran] will rival any market in the Middle East you should be in,” said Scott.
The government’s Department for International Trade is currently leading a delegation of retailers in Iran to explore the opportunities.
Scott said in the last 12 months people’s reaction to the market as a retail prospect has gone from “incredulity” to “tell me about it”.
The signing of a nuclear deal between the West and Iran last year has seen the Iranian economy react positively and hopes for a better business environment are “growing rapidly”, according to Euromonitor.
Iran is taking a more sophisticated approach to developing shopping malls, Scott said, and now some of the big Middle East operators are looking to develop there.
Abu Issa Holding, one of the Middle East’s largest retail and luxury goods firms, is due to open stores in Iran next year, it was reported this week.
“It’s definitely a market everybody should be looking at,” Scott added.
Last week in its full-year results announcement Debenhams said its franchise operations have experienced a “more challenging year, with core Middle Eastern markets … seeing the effect of lower oil prices on consumer activity”.
But it added: “Many markets continue to trade well and we continue to see a strong long-term future in the region.”