Up Close with Tony Salamé
By Paul Cochrane
Tony Salamé could be considered the stereotypical Lebanese entrepreneur: suave, cosmopolitan and with the ability to thrive in unstable environments. Such attributes have made the Lebanese renowned for their mercantile acumen throughout the world, and produced a list of high flying businessmen, from the world's richest man, the Mexican of Lebanese descent Carlos Slim, to the CEO of Nissan-Renault, Carlos Ghosn. Even Lebanon's prime minister, Najib Mikati, is a billionaire through his international telecoms operations and stake in fashion brand Façonnable.
What sets Salamé apart from his contemporaries is that he did not go abroad to seek his fortune but defied the odds in making his retail business Aïshti a multi-million dollar success in post-civil war Lebanon. Salamé's entrepreneurial ascent is not quite your 'American Dream' rags-to-riches story though, yet has all the magic ingredients: hard work, spotting potential, and being in the right place at the right time.
Salamé's first venture into retail certainly started out humbly enough. “I always liked retail. Even at university (studying law) I was travelling and importing goods, and then selling them to friends,” he says. “Later, when I was on holiday, I brought items from Italy to Lebanon. At the beginning I went to stores and bought during sales.”
With $5,000 in his pocket, Salamé opened his first store in 1989, in a warehouse stocking clothes from the previous season. “Lebanese customers were always eager to have the latest fashions, so after six months I went into the same business model as a store, with regular seasons and brands.”
The turning point for Salamé also came that year, when Lebanon was coming out of 15 years of civil war and the Lebanese Pound had seriously devalued. “I went to a fair in Italy, and a lot of Lebanese didn't show up to pick up their goods so I bought them, and that is how I got hold of exclusive brands.”
This signalled the birth of Aïshti (“I love” in Japanese) and Salamé was able to ride the crest of the wave of the re-construction of Beirut after the civil war, when the Lebanese capital started to regain its position as the fashion hub of the Middle East, where trends set in Beirut spread throughout the region.
Over the next decade Salamé secured contracts to distribute luxury designer brands. Yet they were not easy deals to strike, entrusting a young man – Salamé is now just 45 – to represent world famous brands in a country known for conflict rather than luxurious living.
“I think if a CEO wants to do something he has to be persistent. Anyone can do things to create change but it needs persistence, and Beirut is a difficult place to do business,” he says. “To convince a brand to come here takes years. But those that didn't come regret not coming before, with one principal (of a fashion house) saying he lost 20 years of his life by not being in Beirut earlier.”
Aïshti certainly put Beirut on the map as a fashion destination when it opened its flagship department store in the re-developed downtown in 1999. This was accompanied by opening monobrand stores, with Aïshti today having over 150 brands and 40 mono brand stores that read like an A-Z of the hottest names in fashion: from Gucci to Fendi, Roberto Cavalli to Burberry, Dolce & Gabbana to Jimmy Choo, Marc Jacobs to Dior, and Cartier to Ermenegildo Zegna to name a few. "We turned downtown into a district for shopping and a cultural scene rarely visualized in the Middle East,” he says.
However, Salamé will not take sole credit for Aïshti turning Beirut's image around. “It is perhaps not our merit alone, as customers have pushed us to be on top of what is going on and to meet their demands. Lebanese women are very stylish, and Gulf and European women that come here want to dress like them too, so that is an advantage,” he says. “When principles come to Beirut, such as from Prada, they are impressed by the choice of our clients and can't believe what is here in Beirut and the way people dress.”
Salamé recognized early on that Aïshti needed strong brand name recognition and and also needed to appeal to the right clientele. In 2001, he set up Aïshti magazine (now called A) as a promotional vehicle for its brands and as a way to publicize a luxurious lifestyle, with articles ranging from fashion to architecture, food and health, to art and travel. Originally distributed free to clients in Lebanon and throughout the region, the bi-monthly magazine currently has a circulation of 20,000 and is sold on newsstands.
“I didn't want to go into marketing or magazines, but we couldn't find the right medium or the right quality for communications,” says Salamé. “This is why we only have billboards within Beirut and not all over the country; we are selective.”
Salamé has applied the selective mantra to the Aïshti stores themselves; there are only three in the country. But rather than be overly niche, Aïshti introduced a new store concept, Aïzone, directed at a younger clientele, and brought out a sister publication, Gossïp, which is distributed free of charge at Aïzone stores. With nine outlets in Lebanon, the concept has changed the makeup of Aïshti’s buyers, with around half of clients in 2005 foreigners, primarily from the affluent Gulf countries. Today, the Lebanese stores account for 84 percent of Aïshti's annual revenues of $205 million, the remainder from Aïshti and Aizone stores in Jordan, Dubai and Kuwait. “The Lebanese account for around 70 percent of sales. That share grew due to Aizone and a bigger selection,” says Salamé.
Currently, Aïshti has 900 employees, with 26,000 square meters of retail space in Lebanon, in addition to restaurants, cafes and spas, and some 6,000 square meters in Jordan, Dubai and Kuwait.
While a move into Jordan and the Gulf countries was essentially a “no-brainer,” to go to customers themselves rather than relying on them to fly to Beirut to shop at Aïshti, Salamé has pondered markets further afield.
“I went to India and planned to open there, but the taxes were incredibly high, especially inter-state taxes, and rent was astonishingly high – till now all big brands are losing money (in the Indian market),” he says. In Salamé's opinion, the Western markets are saturated, and it is emerging markets that hold promise. Unsurprisingly, China is likely to be the next market for Aïzone. “I want to see it as a concept that can be expanded,” says Salamé.
Neighbouring Syria was another market that Aïshti had entered, but has closed operations due to the conflict. “You have to wait for opportunities. In Syria we were planning to open a boutique hotel at an old convent, it was a perfect site but we have pulled out,” he says. “Any opportunity to express the Aïshti lifestyle I would do it. We are opening six more stores in Beirut and introducing new brands such as Brooks Brothers.”
Somewhat exceptionally for Lebanon, Salamé has his eye on the long-term rather than the more common business model of fast returns on investment due to the precariousness of the economy and the country's turbulent political situation. “In Beirut I've learned to be resilient and to work long-term as there are always ups and downs, for they come every five years. We have to be tolerant and accepting of all the problems on the human being level. But despite all the problems here, it is still amazing the energy when compared to other markets, which are depressed.”
With the long-term in mind, Salamé commissioned renowned Iraqi architect Zaha Hadid to design the 20,000 square meter Beirut Souks Department store, which is slated to open in the next three years. At the same time, Salamé is investing $50 million in Aïshti Seaside and the art foundation, which will have 17,000 square meters of retail space and a dedicated 3,000 square meters for the Aïshti Foundation, which is to promote art in Lebanon and house a portion of Salamé's private art collection of over 1,000 pieces. “I was running out of space - I could show different parts of the collection for the first four to five years of the Foundation,” he says.
To Salamé, there is a clear relationship between art, fashion and music, and he recently started to exhibit art works at Aïshti stores. “There was something missing in the stores, so we hung art pieces to give the interiors an extra edge and something new for the customer to see,” he says.
The Foundation will take the blend of fashion and art further. “It is a club to help people culturally and beyond Aïshti as a fashion destination, not as a hard sell but to give back to people.” If all goes well, Salamé expects the additional retail space to generate $500 million in revenues in Lebanon within the next five years. “We will have to work hard as the investment is huge,” he says.
Family: Wife and three children (two sons and a daughter, aged 12, 10 and 9)
Do you remember your first foreign customer? Yes, and they are still loyal to Aïshti .
How do you like to be treated when travelling? I like to feel at home at a hotel.
How do you like to be treated when shopping? I used to go to lots of retail places, but now I don't. I go to design stores, shows, galleries and museums.
Favorite city to go for vacation? I love New York, but it is a mix of business and pleasure. Italy is my second country and I love Amalfi.
Favorite city for shopping purposes? Milan as shopping is concentrated on two to three streets and I live right by them.
Favourite designer? I can't say which as I know many of them and I like them all. My favorite architect is Zaha Hadid.
What is most important for you when you are staying at a hotel? Quality of the pillows and the beds. I don't sleep that much, so room service is important as if I wake at 4am I need good service.
What thing do you always buy when traveling abroad? Watches.
What do you do in your spare time? I collect art.
Who has been an inspiration to you? My wife Elham, the late and great retailer Marvin Traub, who headed Bloomingdale's, and also Domenico De Sole, the president of Gucci.
Photography by George Haddad - www.georgehaddad.co