High-growth sports sector venture will give Marka operational profitability for 2015
Dubai, UAE, April 13, 2015: Marka PJSC, the UAE’s first public joint stock company focused on the fast growing retail and hospitality sectors, today announced that it has completed its acquisition of Retailcorp UAE LLC, a subsidiary of Istithmar, a Dubai World company. The announcement follows the company’s December 2014 agreement to bring the company into its portfolio in a deal valued at around AED 220 million.
“We are delighted to have finalised the acquisition of Retailcorp, one of the largest retail companies in the UAE’s sporting goods sector. This deal is in line with our strategy to establish a diverse portfolio of assets and successful businesses. It bolsters and diversifies Marka’s revenue sources, our bottom line, and the value we bring to our shareholders,” said Jamal Al Hai, Chairman of Marka.
Marka will invest and grow Retailcorp’s existing business with a goal to achieve double digit growth over the next 12-18 months. The company aims to do this through a strategic focus on key areas including customer service, staff training, new product range additions, visual merchandising, promotional activities, digital and social media marketing and IT infrastructure expansion. Marka is already in talks with a number of organisations to open new stores and grow Retailcorp’s existing retail footprint.
Marka’s acquisition of Retailcorp has been funded by a blend of the company’s own collateral and bank facilities. It gives the company ownership of a network of 15 sporting goods outlets in some of the most highly sought after retail centres in the UAE, with locations including Mall of the Emirates, Mirdif City Centre, Ibn Batuta Mall, Abu Dhabi Mall and Al Ain Mall. Marka now has the rights to sell sports products manufactured by the world’s most respected brands, such as Nike, Puma, Reebok and adidas. The company says that the deal has provided it with a solid foundation in the high-growth sports retail sector.
“We are confident that completion of this acquisition will have an immediate positive impact on Marka’s revenues and profits. It will position Marka to become operationally profitable in 2015 - its first full year of operations - which in turn will reflect positively on Marka and its approximate 6,000 shareholders,” said Khaled Almheiri, Vice-Chairman and Managing Director of Marka.
Almheiri confirmed that acquisitions will play an important role in Marka’s growth during 2015, as part of the company’s strategy to generate long term value for its shareholders.
Nick Peel, CEO of Marka, said: “The growth of the sports retail segment in the UAE and the region is outpacing what we are seeing on the global level. This is a result of factors ranging from strong population growth, rising income levels, and the pursuit of a growing number of citizens and residents adopting a healthy lifestyle, in part due to the UAE government’s support of the sports sector.”
Marka aims to expand the network of the sporting goods stores, under the brand name of ‘Modell’s Sporting Goods’ in the UAE and the region, Peel confirmed. The chain of stores in the UAE and the region is the first Modell’s franchise outside the United States. Modell’s Sporting Goods is one of the most prestigious family-owned firms focused on sports fashion products in the US. Founded in 1889, it now includes a chain of 155 stores in the US.
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