The Challenges of Building Abroad

These days, many U.S. retailers are thinking globally when it comes to expansion. Some chains have chosen to expand abroad via the franchising model, while others are going it alone.

Regardless of which strategy is used, building on foreign shores has its own set of challenges. Borders Group, Ann Arbor, Mich., for example, continues to grow its global footprint through franchising. While the franchise owners are responsible for building the stores, Borders’ director of construction and facilities Larry Tureff is charged with ensuring that the chain’s brand image remains consistent regardless of the location.

Tureff, who oversees all facilities management and building and remodeling work in Borders’ domestic and international stores, spoke with Chain Store Age after returning from a trip to Dubai.

What brought you to Dubai? 

We have a franchise partner there, and we’re opening five new stores. We already operate eight stores in the UAE.

What is the timetable? 

The first of these new stores opened in September of this year, in the Mall of the Emirates in Dubai, and it looks great. The second opened in the Oasis Mall shortly there after in October, with the remaining three expected to open in the first quarter of 2010.

Where will the other stores be located? 

Two are in Dubai, and one is in Abu Dhabi, which is also in the UAE.

Why did you make the trip? 

Our agreement includes a provision that we give them a construction visit to make sure the Borders’ brand identity remains intact. Our franchise partners follow our architectural standards package for graphics and signage, so we check to make sure they are all correct, along with the color scheme.

What about the other three locations? 

We will send one of our designers as the opening date draws closer for the other locations.

What’s been your biggest challenge? 

Most stores in the Middle East are connected to a mall, so the landlord builds the shell. That brings with it many of the same issues as when the landlord delivers the shell here at home.

But what can make things so challenging is that the malls in Dubai are very strict with regard to a tenant hitting opening dates. If there is a delay in getting things started, the construction timelines get shortened, which becomes a problem.

How does the compressed construction schedule impact you? 

Here is one example: We ask for pictures on a daily basis. But with a shortened construction schedule, things are moving so fast that we don’t get them for a couple of days. And by that point, a small item that could have been easily corrected might have evolved into a bigger mistake.

Do any other challenges come to mind? 

Dubai and most other foreign markets use the metric system, and you have to convert everything. It takes some getting used to. Also, getting owner-supplied materials to foreign markets is a transportation challenge. And you have to make certain compromises. The same material can’t always be specified because it might not be available in a certain market. With paint, for example, we color match.

Are most of the materials in Borders stores outside the United States supplied by the owner? 

Yes, with some notable exceptions. For example, we supply the carpet because we haven’t found a mill there that can produce what we want.

What about labor? 

In the UAE, labor is not a problem at all. In fact, the quality of work is very high. The same is true for the materials. There is a very large selection of high-quality materials.

How are the stores maintained? 

I visited our existing stores on this past trip, and they were all very well maintained. They were well lit and clean. The malls also are very clean.

What’s your impression of the Middle East so far? 

The people are very friendly, and the architecture is phenomenal.