CONCEPTUALIZING COMMUNITY MALLS

Lebanon 2018 | TOURISM & ENTERTAINMENT | INTERVIEW

TBY talks to Frank Matthias Kuntermann, CEO of ABC Group, on tarnishing the myths of e-commerce, launching Lebanon's first corporate think-tank, and managing purchasing power trends.

Frank Matthias Kuntermann
BIOGRAPHY
Frank Matthias Kuntermann joined ABC in 2013 as COO and was appointed CEO of ABC Group in August 2017. With his in-depth knowledge of the retail industry, he has driven ABC’s strategic vision and development and brought new practices to the company, primarily centered on enhancing customer experience. During his tenure, the renovation of the ABC Achrafieh Department Store was completed. Prior to joining ABC, he held the role of General Manager for Hermès Middle East from 2007-2013. He has been a Trade Advisor to the French Government since 2005 and is a Board Member of Retail Inc. in Lebanon. He graduated with a Master’s in Science in Paris.

What strategy are you currently implementing at ABC Group, and how does it differ from the company's previous operations?

The last year and a half has been extremely intense. First, we built new offices; we did not want a modern building in particular, but more of a traditional Lebanese building with a modern interior. ABC is a Lebanese company and we wanted this to be reflected. We then worked on setting up a state-of-the-art logistics network and boosting our new retail concept with the renovation of Achrafieh. Shifting from a family-owned business to a corporation is easy; at first, people did not fully understand the benefits, though this has gradually changed.

How does your new retail concept differ from before?

In our new concept, the central flooring of the department store is in a Lebanese style, with copper and natural stone, and we have increased the feeling of openness and done away with walls. The retail concept that we rolled out in Verdun followed the same trajectory as Achrafieh. The opening of the Verdun department store, as well as the mall, were two extremely important milestones in the company's history. The entire project was rolled out in an incredible way; we built 150,000sqm in three years and delivered the project six months ahead of time and 20% under the initial budget. Our malls are community malls where people already live, and we insert ourselves into a society and reflect their aspirations. When it comes to business, ABC's vision is to make Lebanon a better place, positively impacting the community that we work with.

How is e-commerce influencing the retail sector in Lebanon, and how are companies like ABC Group dealing with it?

There is a big myth surrounding e-commerce that it kills malls. However, when we talk about retail entertainment, customers interact with malls in different ways; many people go to ABC not only to shop, but also to buy a newspaper or eat, among other things. Selfridges and Harrods will continue to exist because as long as one offers an experience, it will always surpass what is offered online. Nevertheless, we are continuously working on making our customer experience more seamless and pleasant, and we will continue to offer things that correspond to people's dreams. ABC is working on an e-commerce project that will likely be rolled out in 1Q2019. We value e-commerce and it is important; however, at the same time we should not overdo it. It should be a complementary service to our existing portfolio.

To what extent has consumer purchasing power fallen due to the current economic situation?

According to Lebanese Franchise Association (LFA), the purchase of luxury goods has fallen by 50% since 2012. Spending on fashion and accessories declined by 30%, meaning the overall cake has shrunk. For luxury, the biggest impact was the lack of influx of large spenders from the GCC. We have continued to advance, especially with Verdun, and currently see double-digit growth. We need to continue to offer a unique journey to our customers and make it an enjoyable experience for them. We have not been hit by this trend, and we are working extremely hard to maintain that.

What projects does ABC Group currently have in its pipeline?

Although we have several ongoing projects, we are mainly focused on the absorption of 2017's projects. We have plans for new brands, standalone stores, and e-commerce. We have also launched Lebanon's first corporate think-tank where consultants work with young employees to come up with key projects. This comes from a German model and I am extremely interested to see how this can be transposed into a Lebanese retail company, as an internal tool, to work on ideas and react, since retail is changing significantly. At the same time, we have young talent who has not always had the opportunity to be involved at a corporate level, especially when it comes to preparing for the future.