Investing for the next wave of growth
Jordanian Duty Free Shops’ impressive growth in its home market is being bolstered by further investment, writes Dermot Davitt.
Jordanian Duty Free Shops (JDFS) marks its 21st anniversary this year, and Founder Haitham Al Majali (who is also President of MEADFA) can reflect on a journey of relentless growth in that time. From one store in Amman, the company now runs 21, principally at borders around the country.
Despite recent economic difficulties in Jordan and the political unrest surrounding the country, the company has increased its sales significantly over the past two decades, reaching US$120 million in 2017, with net profit of US$36 million. One of Jordan’s leading publicly listed companies, capital invested has increased from US$7 million dollars in 1997 to US$32 million in 2017, with the stock price hovering just over US$19 (JOD13.65) as this edition went to print.
Business development continues. In 2016 the company opened its new ‘Boulevard’ downtown shop in a prime location in the heart of Amman; it has around 1,350sq m of floor space compared to the previous downtown store, which had 400sq m. Sales have leapt by around +40% since then, says Al Majali.
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He says: “The new location offers considerably more space, and the area is very busy, with plenty of traffic. When we moved there we were able to offer more products. This helps bring in people who are not accustomed to shopping in duty free.”
The business has of course been severely affected by regional events such as terrorism and political conflict, and in particular by the refugee crisis in Syria. But even in this regard, there is better news.
Al Majali says: “Just recently, we reopened our Jordan-Syria shop at Jaber in response to the government’s reopening of the borders. This will increase our sales without a doubt, and we believe it will help in boosting sales ratings as well as the number of travellers coming from and to Jordan and Syria.”
Other new projects are under way through two subsidiaries created to expand JDFS’ activities in Jordan. One is a limited liability company in Aqaba under the supervision of Aqaba Special Economic Zone Authority (ASEZA), which aims to invest in infrastructure, other commercial projects, imports and exports. This company is currently building a US$30 million commercial centre called ‘The Fountain’ that will house both retail and entertainment from next year. It will serve visitors from Aqaba as well as tourists, and will include many branded stores.
Al Majali says: “The company is in the construction phase of The Fountain. It is designed to the highest architectural and engineering specifications. It offers green building features and contains its own renewable energy project.”
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The other subsidiary aims to maintain JDFS’ position as a leading player in trade and distribution in Jordan. Al Majali says: “We have established a public investment company to operate in the domestic market, to create strategic partnerships with entrepreneurs and start-up companies to help them grow their operations and their investments.”
These investments and the continued expansion of its core border store operations should ensure that JDFS remains at the heart of Jordan’s economic life for many years to come.
Jordanian Duty Free Shops is building on its status as a leader in trade and distribution in Jordan with new ventures (its Amman downtown store is pictured)
The Moodie Davitt Report • The Online Magazine • MEADFA 2018