Interviews

In this interview, Patrick Chalhoub, CEO of Chalhoub Group—one of the largest luxury retailers in the Middle East—discusses the origins of his family business in the 1955, as well as how it has evolved under his leadership.

He begins by discussing the opportunity that his parents saw in 1950s Damascus, and the reasons why—from the beginning—they conceived of the company as a regional having a regional presence. From a young age, he was deeply immersed in the workings of the company because, as he explains in the interview, “it [began] as a small business which required all of their attention… so I remember at lunch and supper, when we were all together, they were always bringing [conversation] back to the business.” Still, he says, he did not always anticipate joining the family business. Chalhoub studied mathematics in France in the 1970s, anticipating a career in applied mathematics. The civil war in Lebanon, however, changed his course. “The stress of an outside threat,” he recalls, “encouraged my family to form closer relationships.”

Chalhoub goes on to explain how the group grew from selling products directly to consumers, to opening brick-and-mortar stores, to developing large distribution networks, and later opening department stores and one-of-a-kind concept stores. He also talks at length about the unique consumer culture in the luxury segment, including both the locus of spending power and the importance of status and perception. In a similar vein, Chalhoub discusses the importance, as the group grew, of creating a luxury shopping experience for clients—as significant a factor as the quality of products on display—as well as how the group gradually went from selling branded products, to cultivating brand recognition in its own right.

Even as Chalhoub Group experienced steady growth, the region underwent significant geopolitical turbulence. In the interview, Chalhoub talks in detail about several periods of crisis, as well as how the group adapted to survive. A key theme across the board, as Chalhoub explains, is that the group has never backed away from risk. “Whenever there has been turbulence… we didn’t stop our activity. Partly because [we think of] our teams as one big family—and we don’t want them to be unemployed—and also because we really feel that, whatever could happen, there is still a population that needs to be served, and we need to adapt to it and to the environment. We need to be there not just when things are good. We can’t run away when things are not.”

Chalhoub and his brother Anthony assumed the role of co-CEO in 2001. Since that time, they have secured exclusive contracts with brands such as Louis Vuitton, Nina Ricci, and others. They have also undertaken major efforts at restructuring and introducing a new governance structure, although the business remains family-owned. Chalhoub concludes the interview by discussing what he sees as the major challenges facing the group in the future, including the transition to online shopping and the evolution of customer tastes and shopping preferences. Chalhoub became the sole CEO following the death of his brother in 2018.

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