Jumbo Electronics looks to expand as sales climb

Jumbo announced this week that sales at its 35 stores across the UAE and Oman climbed 20% in the second half of 2010 compared to the same period in the previous year. The company said its smartphone sales rose 35% last year over 2009, with many its customers choosing to upgrade their phones every six to ten months.

The company's performance was also buoyed by strong sales of flat screen televisions. Jumbo believes that retail growth this year will be partly driven by sales of tablet devices, led by the iPad. 'We ended 2010 on a high note, and this has placed us in an enviable position as we prepare for significant growth across businesses in 2011,' Jumbo's CEO Deepak Khetrapal said.

'With a strong start in January and the upcoming Dubai Shopping Festival, we are off with the best start to the year since 2008, which we should remember was a record year for the sector in the UAE.'

Khetrapal says the excitement for this year's Dubai Shopping Festival is much higher than in previous years. 'With hotel and airline bookings looking very strong so far, I am expecting our sales to be 25% higher than they were during last year's festival,' he told AMEInfo.com.

Gulf region expansion plans

With 31 stores across the UAE and four in Oman, Khetrapal is keen to expand the company's presence in other key markets in the region. 'We are looking to expand in the Gulf region beyond Dubai, as we are everywhere we need to be in the emirate. There is growth opportunity in Abu Dhabi, where we are still a long way from achieving the kind of penetration that we have achieved in the Dubai market.

'In a few weeks the company will open in Marina Mall, followed by another store in Dalma Mall, and we are in the market looking for more properties and location for stores in the emirate,' he said.

The company is also looking to expand its retail business in Kuwait, Bahrain and Qatar, before looking to enter other markets across the Gulf. 'We actually have distribution and other businesses in these three countries, so we have traction there already,' he noted. 'Only having done justice to these markets will we exploit other markets such as Saudi Arabia and Egypt.'

No plans for IPO

The company is also considering opening specialist stores that cater to specific products. Currently Jumbo's stores offer a mix of consumer electronics, IT products, and telecom gadgets. 'I think there is room for us to consider offering specialist stores, rather than carrying on with our existing format of carrying all three of these types of products,' he said.

When asked about taking the company private, Khetrapal said the company had tabled those plans for time being. 'You do IPOs when you need more funds, or there is such a compelling valuation in the market that the current shareholders would be happy to part with some of their shareholding. I think for the current range of investments that we are looking at we don't need outside funding.

'From a valuation perspective, I don't think this market would support the right valuation for any business, so I personally don't think for the next two years we are thinking of going public at all. We don't need to,' he said.