From a single boutique in Damascus, Syria, in 1955, the Chalhoub Group had grown by 2019 to operate more than 650 luxury retail stores in 14 countries throughout the Middle East and North Africa. By blending its knowledge of luxury and its unique Middle East expertise, the Group had built a powerhouse of brands, enjoyed a reputation for excellent service with all its partners, and offered a differentiated retail experience to its customers in the region. However, the company needed to adapt its business model to a changing Middle East. Increased globalization, economic uncertainty, technological disruption, market innovations, changes in customer expectations, and a whole new set of competitors were transforming the luxury retail industry. In recent years, the Group had focused more on the customer experience, modernized its digital presence and data gathering, and invested heavily in innovation. Had it made the right changes, in the right ways, to build organizational agility and capability to drive future performance?ExcerptUVA-S-0319Rev. Apr. 8, 2020Chalhoub Group: Transforming the Luxury RetailerPreparing for his meeting with the company executive board, Patrick Chalhoub, the CEO of the Chalhoub Group (the Group), wondered how best to describe the fundamental shift in the Middle East in the last few years. Increased globalization, economic uncertainty, technological disruption, market innovations, changes in customer expectations, and a whole new set of competitors were transforming the luxury retail industry. While he referred to this as the "new norm," he wondered if this fully captured the challenges confronting the Group, his family-owned company in the Middle East that had been in partnership with international luxury brands for more than 60 years.Company BackgroundMichel and Widad Chalhoub, husband and wife, opened their first store, Christofle, in Damascus, Syria, in 1955. A decade later, the economic uncertainty in the country led the Chalhoubs to relocate their business to Beirut, Lebanon. By 1975, their two sons—Patrick and Anthony—had become active in the business, and the family moved operations to Kuwait. In 1990, they moved their headquarters to Dubai following the Iraqi invasion. Patrick and Anthony Chalhoub took over as co-CEOs in 2001
