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Saudi Arabia 2020 | ENTERTAINMENT, CULTURE & SPORTS | INTERVIEW

There is great demand for jewelry in Saudi Arabia, and L'azurde, being based in the Middle East, understands what Saudi women want.

Selim Chidiac
BIOGRAPHY
In 2010, Selim Chidiac joined L’azurde Company for Jewelry. He has developed the business into one of the world’s leading Middle East-based jewelry manufacturers. Prior to L’azurde, he worked with Red Bull for 12 years, most recently as CEO for the North America division. Chidiac started his career at P&G. He is a graduate of L’école Supérieure de Chimie Physique Électronique de Lyon. He followed that with postgraduate coursework at INSEAD, London Business School, IMD Lausanne, and Harvard Business School.

L'azurde has become the largest gold and jewelry designer, manufacturer, and distributor in the Middle East. It is the fourth-largest jewelry manufacturer worldwide. How have you advanced in the Saudi market?

We were launched 40 years ago in Riyadh by a Saudi entrepreneur. He invested tremendously in manufacturing capabilities and technology. This is why we have a 20,000sqm facility and make annual investments in state-of-the-art technology and machinery. The company was acquired by a private equity group in 2010, which bought 77% of L'azurde, transforming it from a family-owned business to a private-equity-owned firm. Then, in 2016, we listed the company on the Saudi Tadawul stock exchange. In 2018, L'azurde made its first-ever acquisition by taking over the Kingdom-based franchise of TOUS, a fashion jewelry brand that operates more than 800 stores around the world. Our acquisition was one of the largest M&A transactions in Saudi Arabia in 2018. To add this brand, we decided to take advantage of our management skills and understanding of the Arab consumer. We were also aided by our good relationship with malls in Saudi Arabia and Egypt. As of 2Q2019, we had five straight quarters of growing revenues and net income YoY. We have two major markets, Saudi Arabia and Egypt, where 90% of our revenues come from. We have been in Egypt for more than 20 years. We operate two large factories there, employing 1,200 people. We are by far the leader in the Egyptian markets. Overall, we sell 1 million pieces of jewelry each year. Every month we launch 500 new designs. We invest significantly in innovation and design. The first thing our customers ask when they walks into a store is, “What is new?" We continue to innovate, design, and launch new collections, designed specifically for the Arab world. L'azurde has become famous because of its association with celebrities and its collections launched by top designers. There are many up-and-coming fashionistas in Saudi Arabia. We collaborate with some to support Saudi women in entrepreneurship. We want to let them contribute, rather than just being customers.

What are some of the unique characteristics of the Saudi market?

In 2018, we were the highest-selling premium jewelry brand in the Saudi market, in comparison to local and regional players. We are positioned as a premium brand, offering top-quality craftsmanship and designs. We do not compare ourselves to international brands. We understand and come from the region, and we custom-design high-quality premium jewelry for Arab women. We offer gold jewelry that we sell by weight to Saudi women. Gold is a great way for them to preserve the value of their investments themselves. That is an extremely important aspect of our product for Saudi women. Second, we understand the designs they desire for different occasions because of our history of selling, developing, and designing gold jewelry in Saudi.

What are some of the specifics of supply chains in the luxury segment?

We borrow gold through banks that hold our working capital. We do not buy or own gold. We get diamonds mainly from India, directly from suppliers we have known for many years.

What are your strategic priorities and ambitions for the coming years ahead?

We have a major opportunity with the launch of Miss L', our fashion jewelry brand. Moving forward we will fully leverage our understanding of the Middle East to grow L'azurde, TOUS, and Miss L' throughout the region. We also may potentially expand into Europe and the US. Over the next year, we will add a few additional brands to complement our current portfolio. The jewelry industry overall is fairly fragmented, and there is room for many players to target different needs and aspirations of consumers. This is why we will move from a single-brand model to a multiple “house of brands" model over the coming years. We are on track to achieve this.