Bloomingdale's set its sights on Kuwait

Macy's Inc. has big international expansion plans for their higher end department store, Bloomingdale's. Earlier this year, they opened a new location in Dubai, and now they've set their sights on Kuwait as they boost their presence in the Middle East. The department store has licensed a deal with Al Tayer Group to open the first Bloomingdale's store in Kuwait in 2017.

While the opening of the store is a year away, oil prices remain low, which could pose a lot of economic pressure for Kuwait. Either way, Al Tayer believes that this won't hinder Bloomingdale's chance for success in the region.

“Kuwait has always been the cultural center of the Gulf region. It had oil much earlier than Abu Dhabi and Dubai and as a result, it has the most sophisticated and well-traveled people from the region,” Khalid Al Tayer, chief executive officer of retail for the Al Tayer, said to WWD. “The people of Kuwait really, really understand what the world has to offer. Oil prices coming down for us is not good news, but the economy can weather the current downtrend. It’s quite a stable, resilient economy — oil based but with some of the best homegrown regional companies, in retail and logistics.”

The proposed Bloomingdale's store will cover 93,000 square feet at the 360 mall, a relatively new space that is six years old. The 360 mall was developed and owned by the Tamdeen Group, and is home to luxury brands like Gucci, Cartier, Prada, Burberry, Jimmy Choo, Tory Burch, and Bottega Veneta.

Bloomingdale's to open in Kuwait in 2017

The store will be edited down to be similar in model to the Bloomingdale's in Soho. It will carry exclusively women's wear, with focuses on ready-to-wear and contemporary brands, along with footwear, and accessories like handbags and jewelry.

Although Macy's Inc. has been a major and powerful staple in the retail world for decades, they are very late to the international retail market. Nevertheless, they are working on playing catch up. In 2018, Macy's will be opening their first store in Abu Dhabi in the same mall a Bloomingdale's will open in that same year.

Macy's also has plans on partnering with Alibaba to launch e-commerce in China.

The company's deal with Al Tayer is a standard licensing partner agreement where Macy's Inc. receives licensing fees and royalties based on sales, while Al Tayer owns and operates the store. Macy's will have a close hand in maintaining the design and merchandising of the stores, which is different from a typical licensing agreement. The advantage to a licensing agreement is that you have a retail partner who better understands the market.

While Macy's Inc. does not disclose the individual volume of their stores, the Bloomingdale's in Dubai is reportedly one of their top 4 performing stores. Kuwait is more residential, so Bloomingdale's success in the region will be dependent on affluent residents. The store is expected to have a major focus on personal shopping services too.

In Abu Dhabi, Bloomingdale's and Macy's will open at Al Maryah Central development on Al Maryah Island. Both stores will open in spring 2018. The Macy's store will be four levels and 205,000 square feet, and the Bloomingdale's store will be 230,000 square feet.

Al Tayer, which currently represents around 600 brands across fields like automotive, contracting, and distribution, hasn't ruled out the possibility of expanding Bloomingdale's and Macy's further in the Middle East, but has said they will approach expansion with caution.