It’s 2010 and the new owners of Harrods have parked their luxury sports cars on a busy street outside the department store in Knightsbridge, rather than avail themselves of the valet service that their latest acquisition could provide. Sporting the renowned baby-blue colour of Qatar’s Al Thani royal family, the Koenigsegg CCXR and Lamborghini Murcielago LP670-4 SuperVeloce, two of the world’s fastest cars, were promptly clamped by parking inspectors.
With an estimated family fortune of €1.5 billion to €2.3 billion it’s safe to say that the owners wouldn’t have had a problem paying their fines. But if the truth be known, they were just doing what they’d normally do at home: park as close as possible to the entrance of a building to spare themselves the walk. After all, it gets pretty hot during the summer in the Gulf Cooperation Council region, and their casual approach to parking is a widespread practice in the United Arab Emirates, Qatar, Kuwait and Bahrain. Everybody does it, including the billionaire and millionaire owners of supercars. But in London it’s news, which probably came as a surprise to the Al Thanis, who are not used to seeing their names bandied about in the public arena. Maybe they’ll have to get used to it as their empire expands.
While the huge fortunes of some GCC countries were produced on the back of their oil reserves, it is the family conglomerates that form the backbone of many of their economies. In fact, about 80% of businesses in the GCC are family run. They may have started out small – many began as simple trading companies – but they have grown to become major conglomerates that span a diverse range of industries, including luxury retail, construction, property, transport, media and hospitality.
Their influence will only grow in the coming years, as “olde world” enterprises on their steady march east (or west, depending on where they are headquartered), try to get a foothold in the region. It’s not gone unnoticed in the boardrooms of Boston or Beijing that the Middle East is an emerging region that boasts a large proportion of the world’s millionaire households, and that it has weathered the post-Lehman Brothers storm relatively well. The families are, in many cases, the gatekeepers to the region, and if businesses from elsewhere want access to the region they will have to get into bed with conglomerates such as the Al Thanis, or UAE company Majid Al Futtaim Group.
That’s because if you want to move into the Middle East you have to do a franchise deal with one of these families. That might not be common in other countries, but in the Middle East it’s the way things are done.
And it’s big business. One of the largest of these conglomerates is the UAE-based BinHendi Enterprises, which was founded by Mohi-Din BinHendi in the 1970s. It has franchise deals with some of the world’s biggest luxury names: Cerruti 1881, Hugo Boss, Porsche Design, Shanghai Tang, Carrera and Gianfranco Ferré, just to name a few. The company’s most recent expansion has been overseen by the billionaire founder’s 29-year-old daughter Amna BinHendi, who became chief executive in 2007.
Even such firms as French luxury group LVMH and Indian steel business Tata have had to do deals to get a toe-hold in the GCC. But it is retail that would have to be considered as one of the fastest-growing sectors in the region. And everybody wants a slice of the market. French supermarket chain Carrefour and Swedish flatpack behemoth Ikea both have deals with local families, for example.
It’s a canny move by the region’s dynasties that is embedding their power and influence, even as their countries open up. It should ensure that if we ever move to a world beyond oil, the sheiks will still be able to afford their baby-blue Lamborghinis – and parking tickets.