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RIYADH: UAE-based Apparel Group is strengthening its presence in Saudi Arabia’s retail sector through strategic partnerships and expansion as the Kingdom experiences a surge in new mall developments. 

Speaking to Arab News on the sidelines of the Retail Leaders Circle Global Forum in Riyadh, the CEO of the group, Neeraj Teckchandani, highlighted the company’s commitment to growth in the Saudi market.

“There are a lot of the landlords over here and partners with whom we work. So we signed a MoU yesterday with Point, the new mall from the Red Sea Mall group, which is coming in the sea region where we have taken a significant position. And, there is another one which we are signing this afternoon at Mall Of Dhahran,” Teckchandani said.

He highlighted the company’s strategy of expanding through partnerships with mall developers. “These are all strategic partnerships which we work with these landlords. And whenever there is a new mall coming, we will take a larger position over there. And those are the MoUs we have signed. So we have signed two of them, Mall Of Dhahran as well as Point.” 

The Kingdom’s retail sector is undergoing a transformation, with significant investments in mall developments. “There are about 30 malls which are coming in Saudi over the next five years. I don’t think that any other Gulf country has got that number of malls coming up or even combined.” 

The CEO added: “Saudi is evolving, we have avenues in Riyadh coming. We have a lot of malls coming from Cenomi Centers and so on. So, for us, the growth potential is huge in Saudi. Last year, of the 250 stores that we opened in the Gulf, nearly 150 were in Saudi Arabia.”

The company is increasingly expanding its brand portfolio and footprint in the Kingdom. “So in terms of the investments, there is a lot. We signed about 28 new brands last year. We took over from other operators like Cenomi Retail or Alyasra or AlMalki or Landmark Group Saudi Arabia branch, some across the region, some Saudi specific. So, we did that for eight of the brands. So we have a lot of expansion that way,” Teckchandani said. 

The top official added that Apparel Group is set to open close to 300 stores in the region, and Saudi Arabia would be home to around 180 to 200 of them. “So big expansion plans, and we are also putting a lot of the investments into the hard infrastructure. So we are building a new distribution center in Dubai, and a new one in Qatar. And we have just finished the one in Saudi.” 

He also underlined the importance of preparing for future retail demands. “We have so much expansion coming in the next three to five years in Saudi Arabia. So we are investing a lot in terms of infrastructure, hard, whether it is a distribution center or device or the soft, we’re putting the retail academy, upskilling the talent and so on for the growth that we’re in charge of over the next couple of years.” 

According to Teckchandani, the evolution of the retail sector in the Kingdom presents numerous possibilities: “I think a lot of opportunities that way, as I mentioned, over 30 malls coming in the region gives huge opportunities.”

He added: “Saudi lacks mega malls like a Dubai mall or an Avenues Kuwait. So we will see the first one with Avenues Riyadh coming up that will lift the level of retail to the next level.” 

While the retail sector faces some challenges, Teckchandani does not see major threats apart from geopolitical factors.

Apparel Group is also focusing on omnichannel integration to enhance customer experience. “Today, for all the major retailers, it’s an omni channel, and so all of them are offline and online as well.” 

The CEO added: “All of our 2,000-plus stores, our 14 brand.coms and 61 marketplaces are seamlessly connected. I have a single view of inventory and this is available everywhere.” 

As part of its expansion, the company has signed multiple brands across fashion, beauty, home, and food and beverage, including Koton, Sur La Table, Estée Lauder, and Allo Beirut. “So, in every segment, we have signed new brands. Some have already opened in Saudi Arabia, while others are in the phase of opening.” 

Understanding and adapting to consumer trends is key to long-term success in the retail industry, according to Teckchandani: “I think you always have to see the relevance and you always have to remain relevant for your customer because you have to understand what the customer wants.” 

He added: “You can get the initial hype because of the brand power, but if you don’t remain relevant or don’t hear your customer’s voice, you will be left out. I mean, the customer will move on and we have seen this with so many brands who left the region.” 

Looking ahead, Teckchandani sees experiential retail as the next major trend shaping the sector. “Whether it’s retail or F&B, it has to be more experiential, you cannot be just transactional or selling a commodity. Gone are the days when you were just selling a piece of gummy or a footwear.” 

The top official emphasized that digital elements and an omnichannel experience at the store are necessary.

While an initial public offering is on Apparel Group’s horizon, it is not an immediate priority. “Early days for us, I would say, definitely there are plans in the medium term, but not in the near term. We will be looking at something in the range of three to five years from today,” the CEO said.

RIYADH: Saudi Arabia’s Panda Retail Co. is set to open more than 20 new stores in 2025, maintaining its pace of expansion from the previous year, according to the company’s chief operating officer. 

Speaking to Arab News at the Retail Leaders Circle Global Forum 2025 in Riyadh, Abdullah Al-Sabban said the company’s focus this year will be on expanding within Saudi Arabia, particularly in Riyadh and remote areas.  

Panda’s expansion supports its goal of sustainable retail growth through innovation while highlighting the resilience of Saudi Arabia’s retail sector, which recorded SR37.4 billion ($9.97 billion) in sales in the third quarter of 2024 despite global economic challenges. 

Retail sales in the Kingdom are forecast to reach $161.4 billion by 2028, while the e-commerce sector is projected to exceed $13.2 billion by 2025, according to data platform Statista. 

“Our theme for this year is ‘expanovation.’ Expanding the sites, stores, and locations is very important. But we’re more focused on Saudi Arabia right now, more focused on Riyadh, and more focused on remote areas. We want to make sure that everybody deserves to have a Panda experience across the Kingdom,” Al-Sabban said. 

Self-funded growth 

Al-Sabban clarified that the company does not require external funding for its current expansion plans. 

“When you’re talking about 20 stores a year, that’s not an area where you need to go and find funding and support,” he said.

“We want to ensure sustainable growth. We want to make sure we have the right number and continue growing at the same trend that we’ve been growing over the last year or two.” 

He noted that securing funding would only be necessary if the company aimed to double in size. 

“Today, we’re running at 200 plus stores. If you told me I want to grow to 400 in a year, then yes, we need to get a huge amount of money. But I think it has to be organic growth. You can’t just go and expand because if we expand all our stores, we also need to expand our supply chain, logistics, commercial operations, and trucks,” he said.  

“We need to make sure that we don’t face failure as we expand in a very dramatic way. So, for now, we are going to keep it smooth and steady to ensure the right sustainability going forward,” he added. 

Regarding a potential initial public offering, Al-Sabban said Panda is still assessing the right time and approach for such a move. 

“IPO is a very critical situation, and it’s not easy to answer that, especially since we’re part of a bigger group in Savola. There are some thoughts, but we’re still discussing, negotiating, and understanding what would be the right time and approach for something like that,” Al-Sabban said. 

He said that going public is challenging and timing is key, emphasizing the need to ensure that an IPO is the right move for the organization. 

Market positioning 

In addition to opening new locations, Panda is investing in upgrading its existing stores through its customer experience and innovation program called CXR. 

He added: “We are running both projects simultaneously, ensuring we improve our existing stores while opening new ones. Hopefully, by the end of the year, we will have opened more than 20 stores in new locations.” 

Addressing competition in the Saudi retail sector, Al-Sabban emphasized Panda’s long-standing presence in the market. 

“We’ve been one of the oldest retailers in Saudi Arabia. We’ve introduced the hypermarket model in Saudi Arabia. So, we’ve been leading the market. We know our customers,” Al-Sabban said. “I think this is the challenge that people coming from outside will face — understanding the customer behavior and mindset.”  

He noted that while international retailers entering Saudi Arabia are targeting specific segments, Panda serves a broad customer base. 

“Each outside supermarket coming in is focusing on a certain segment of customers. We are focusing on everybody in Saudi Arabia, from premium all the way to different levels,” Al-Sabban said.  

He noted that while building brand trust is a challenge for international players, Panda has already earned consumer confidence, with its loyalty program, boasting over 10 million users, reflecting a strong customer base. 

Al-Sabban said Panda remains committed to maintaining competitive pricing. “On the other hand, we’re working with our suppliers to ensure we have the best prices for our customers. Make sure that we maintain that perception of the lowest price and best quality,” Al-Sabban concluded. 

“We want to make sure that we’re always known for the best prices, the best quality, and the freshness of our products for our customers.”