ROOM TO GROW

Lebanon 2017 | TOURISM | INTERVIEW

TBY talks to Romen Mathieu, Chairman & CEO of Khoury Home, on growing sales, the new executive team, and Lebanon's retail forecast.

 Romen Mathieu
BIOGRAPHY
Romen Mathieu is the co-founder and has been managing partner of the EuroMENA private equity funds, part of the Capital Trust Group covering the MENA region, since 2004. Mathieu is also a board member of the International Chamber of Commerce Lebanon. He has more than 20 years experience in corporate transactions and family-owned businesses, covering Europe and the MENA region. He was a partner at Ernst & Young Corporate Finance and M&A in France. He began his career with Arthur Andersen in its corporate restructuring and finance division. Mathieu holds two graduate degrees in finance and a master’s degree in management.

How would you evaluate Khoury Home's operations over the past two years?

Khoury Home went through difficult years; however in 2015, we managed to overcome the hurdles and resume growth. In 2016, the firm had a great year with a net income growing by 10%, exceeding budget and reaching approximately USD1.4 million. In 2021, we expect Khoury Home to be cash rich, improving working capital and increasing sales to USD150 million. Since 2011, the Lebanese market has been witnessing a 10-15% yearly decrease and Khoury Home managed to retain healthy levels of sales, increasing its market share from 13% to 25%, representing a significant increase and an unprecedented one in the sector. Today, we are growing faster than any other competitor in the country. Our teams, led by a new executive committee consisting of leaders who have been with the company for several years, have been at the origin of this growth and will surely help Khoury Home continue its progress in the years to come.

Last December, Khoury Home broke records, netting USD10 million in sales during five days around Black Friday. What strategy did you follow to achieve these results?

Nobody can rival the kind of experience and service we offer in our showrooms. And on Black Friday, we provide the market with irresistible deals, offering huge discounts while retaining the same quality of customer service. We also sell through an online platform to increase our reach and make it more convenient for our esteemed customers. Moreover, we are developing our wholesale segment, where we distribute our brands to the Lebanese market. We are continuously working on acquiring new brands that we believe will improve our product offering. Furthermore, we are expanding into new cities, opening in Zahleh (2016) and in Tyre later in 2017. We also recently launched a new segment, La Maison by Khoury Home, that will be offering a large selection of home furniture and gifts in our biggest showrooms first, and soon in all of them.

How do you foresee the retail sector evolving in five years in Lebanon?

This is a difficult sector, not just in Lebanon, but worldwide. The market went down from USD600 million to USD350 million, mainly because of the Syrian and regional turmoil. Approximately 20% of our sales used to be generated in Syria. The economic situation in Lebanon today is extremely difficult with lower consumer purchasing power. For instance, a couple of years ago, consumers tended to immediately replace their defective fridge or washing machine, whereas today, they would rather fix it for a fraction of the cost. Since 2011, we used to always say every year would be the hardest year, but every year just kept getting harder than the previous one. Now, in 2017, we have a new president and government but parliament is yet to be elected, and it is a hard situation in general. Usually, I am optimistic. Hopefully, this summer, tourists will come back and people will come from the Gulf. Hopefully, the real estate sector will also pick up and a parliament will be put in place. These are all necessary because everybody is tired; businesses and business people are tired. That being said, we are in an optimal position to grasp a positive market momentum as we enjoy having the best organization, management, leadership, and quality.

What is your main goal for the coming 12 months?

Massive growth is our plan. We have restructured and reorganized the company into a moneymaking business, and our new management is thriving to reach new heights. We are also moving to either an IPO or a private placement operation in the near future.