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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 : ,

UAE Affiliate of Top 5  Furniture Multinational Anticipates a Shift in Homebuyers' Behaviors 1
Goals

Goals

We were entrusted to provide solutions for a contractor’s declining business in the middle of 2009.

Situation

Situation

Our client was a contractor for custom-made residential furniture, kitchens, and wardrobes in addition to office furniture.

Analysis

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

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).