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.
Fact box
Age: 45
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
