UAE Affiliate of Top 5 Furniture Multinational Anticipates a Shift in Homebuyers’ Behaviors We helped a residential, office and project furniture contractor change their business model to become financially-stable and profitable. Sectors : Real Estate and Construction Services : Goals We were entrusted to provide solutions for a contractor’s declining business in the middle of 2009. Situation Our client was a contractor for custom-made residential furniture, kitchens, and wardrobes in addition to office furniture. Analysis The client was generating revenues by working exclusively with a handful of main contractors in the residential sector. The company did not have any business development strategy or a sales process. They relied on repeat business from the same key clients. This presented a high concentration of risks. If the construction market collapsed, many main contractors would default on their payments, which would send our subcontractor into a tailspin. In late 2009, the real estate market in the UAE was reaching its point of over-saturation. Construction investments would drop sharply, and the economy was likely to suffer from a recession. Our client faced the risk of going out of business if solutions weren’t forthcoming. Actions Based on a detailed market study, we recommended our client to enter the furniture retail market and to provide interior design services because the contracting market was getting-oversaturated and supply exceeded demand by a long margin. Identified new Italian suppliers of residential furniture. The company added 5 new brands (Faber, Gandi, Lineager, Febal and Heral Cucine) to its product offerings. Participated in the identification, negotiation and agreement with an Italian multinational franchisor in the field of customized kitchen and wardrobes (Colombini Gruppo). Introduced the new concept of 'ready-made' kitchen, wardrobes, office and home furniture to the UAE. Identified the location for the company’s new high-end showroom on Sheikh Zayed Road. Developed the creative brief to design the showroom including the merchandising concepts and in-store ambiance. Planned pre-opening preparations of the new showroom. Re-structured the sales and marketing department (new organization, recruitment of interior designer, showroom manager and 2 institutional sales representatives). Revamped the company's sales policies (pre-qualification documents, tenders, prospecting, relationship-building and loyalty) when dealing with interior designers, architects and home decorators. Every sales representative signed 7 contracts on average per year. The median contract value for interior design was AED 647,000. Total revenues in the first year were AED 11.5 Million divided into retail sales (AED 5.2 Million and project & export sales of AED 6.3 Million). Back to Case Studies
