At the time, everybody was talking about the markets and Merrill Lynch. The
bank's private equity unit sold its stake in Debenhams, 47 million shares, 6
per cent of the British retail group's stock, late last month and walked
away with a £28 million windfall.
The sale price was 60p a share and, not surprisingly, those shares tumbled
from 71p to 59p as news of the sale broke.
Almost overlooked was where those shares went.
Speculation centred on Bestinver, the Spanish fund, and on Mukesh “Micky”
Jagtiani, the Dubai-based billionaire entrepreneur. Those looking at the
bigger picture found fuel for the rumours that Mr Jagtiani wanted to mount a
takeover.
Mr Jagtiani, the head of the retailing giant Landmark Group, says not. His 9
per cent stake in Debenhams is, he says, strategic rather than a prelude to
a full-blown bid, although he does not quite rule that out, should
circumstances change.
“I bought the shares for, basically, trading,” he told The Times. “The markets
were going down and the shares fell. At the moment my intention is to buy it
at 65p and sell it at £1.30.
"If there is something very tempting that presents itself, that could
change.” he said.
Shares in Debenhams, which last week reported a fall in first-half profits,
ended last week at 63p.
But Mr Jagtiani, 56, also said this: “If I owned Debenhams, I would do a lot
of things differently. With retail, you have to constantly innovate, and if
you don't innovate you die.”
And this: “I think they could have innovated a lot and instead they took an
easy way out by franchising their arrangements. If they had gone for better
global sourcing, they could have been a much bigger, larger company.
“At the end of the day there's never been proper ownership of the company. I'm
an entrepeneur. When I trade, I do it on a daily basis, with myself in mind.
Whatever I do with the company, I put in my pocket. It's my profit.
“That's not the case in Debenhams. It's all with venture capitalists. It's not
the same ownership as I would have if I was owning Debenhams.”
Mr Jagtiani said that, hypothetically speaking, he would apply the same
principles to Debenhams as he did to his Landmark empire - improve sourcing,
cut costs in finance and administration and do business on a larger scale.
Ask Mr Jagtiani what his biggest problem is today and you get a one-word
answer: “Cash. The problem is when we work in the Middle East we generate a
lot of it and we have to park it somewhere. There's a limit to how much you
can grow our own stores and we are reaching saturation. So I am sitting on
quite a bit of cash and I want to utilise it well by doing acquisitions.”
He says he plans to invest up to $20billion in acquiring British and American
retail assets. “I am impressed with a few of the stores I have seen. Primark
is a very good brand that I admire a lot. New Look is good and you have
brands like Abercrombie & Fitch. You have some brands like Zara, and
Pull and Bear, which are very credible. Some of the department stores, like
Saks and Bloomingdales. I also like Far East Traders.”
Indeed, last autumn, Mr Jagtiani went in with Baugur, the Icelandic investor
headed by Jon Asgeir Johannesson, in a bid for Saks,the American luxury
retailer. He is “continuing to look at the company”.
Moreover, he has announced plans to expand his existing empire with a $500
million investment in India over the next two years. He also plans to raise
further capital through three IPOs in the next three years, in Saudi Arabia,
Dubai and India.
“I have to follow what the banks tell me,” he said. “They tell me I have to
take part of that money and put it in the West. I have to do it. Either
that, or put it under my mattress.”
Mr Jagtiani's success has earned him close personal ties to Dubai's most
prominent families - “Nobody opens a mall in Dubai without talking to Micky
first. It is out of respect,” a source close to the Royal family said - but
he knows London well. He hit rock bottom in the city.
When he was 17 he flunked out of accounting school in London, squandering the
modest family savings that his father, a department store clerk, had used to
pay for his tuition.
Too ashamed to return to Kuwait, where his family had settled after emigrating
from India, he struggled to survive in London. He drove taxis and changed
beds in a hotel near Earls Court to get by and fuel his taste for cigarettes
and alcohol.
When he could no longer make ends meet he returned to the Gulf, where tragedy
struck. His older brother, Mahesh, died from leukaemia. His father succumbed
to diabetes a few months later. Then his mother died from cancer. Mr
Jagtiani was 21 years old.
“I was an orphan,” he said. With no family, no job and no education, Mr
Jagtiani was at first tempted to return to his native India and devote his
life to charity. Instead, he took his $6,000 inheritance and flew to
Bahrain, where he opened his first store in the ground floor of a row of
shops, rented by his brother before he died.
“Babyshop” catered to a swelling demographic of South Asian expatriates who
were flocking with their families to the oil-booming Gulf in search of work.
Mr Jagtiani understood how much parents from those cultures tended to “spoil”
their children and filled his store with clothes, toys, prams and furniture
catering to the middle class with new money to spare. In the beginning, he
could not afford to
hire any staff, so he stocked the shelves, swept the floor and ran the till
himself. “I really started with very little,” he said, “and I've never had
any hang-ups about menial work. You know, until then I had spent
most of my life coming out last or second last, but in the end I've done okay.”
Today, his $1.5 billion Landmark Group sells clothes, furniture, shoes and
homewares in more than 840 stores in the Gulf Co-operation Council economic
area, Jordan, India, China, Spain, Pakistan and Egypt.
Last year it netted $211million in sales. Mr Jagtiani says that his business
has grown by 40 per cent each year. In the past 12 months he has branched
out into leisure and restaurants.
“I think a lot of my success is attributed to being in the right place at the
right time. And possibly the right vision along with that. We worked with a
concept of American retail called category killers: large store format, big
market, easy access, affordable. And we score well because our ranges are
one of the largest of any produce we specialise in.”
Landmark's fortunes have flourished as waves of Asian and South Asian
expatriates continue to arrive in the Gulf, answering the call for skilled
and unskilled labour.
Mr Jagtiani has retained almost complete ownership of his company. His
personal fortune is estimated to be close to $3billion, making him one of
the wealthiest men in an extraordinarily wealthy region.
Yet he remains stubbornly frugal, flying economy, driving himself to work in
his only car - a Mercedes - and sleeping every night on the floor of his
ten-bedroom villa (“my wife wanted to buy it,” he said, almost
apologetically).
He gives generously to charity and his greatest ambition at the moment is to
figure out a way of bringing English-language satellite television to the
poor in India, as a way of expanding their horizons.
He relocated his family and company headquarters to Dubai in 1992, after the
first Gulf War. At the time, he had six stores and 400 employees.
His timing was excellent. Dubai's rulers were embarking on an ambitious plan
to use their oil wealth to transform the emirate into the business and
tourist capital of the region. The strategy involved a flurry of
construction, the opening of sprawling shopping centres and the building of
exclusive housing intended to lure professionals with families.
Mr Jagtiani ignored advisers who told him to turn his attention to the luxury
market and stayed focused on the middle class. “You know a lot of the things
we did, people always said we'd go bankrupt, but I'd still go out and do it.
And we were successful and really landed on our feet. And that is something
that comes from the gut, that feeling.”
He admitted that he is not “a financial guy”, so he has a team of advisers and
accountants who analyse his retail outlets and search for ways to improve
them, through sourcing, clever displays and luring more shoppers with things
like children's play areas.
Innovation, in other words. The kind of thing that he might, in certain
cirumstances, hypothetically speaking, bring to Debenhams.
CV
Mukesh (Micky) Wadhumal Jagtiani
Age: 56, born in Kuwait
Education: Began school in Bombay, then went to Brummana High School, a highly
regarded Quaker boarding school in Lebanon, east of Beirut. After that he
moved to London but dropped out of accountancy studies
Career: Chairman of Landmark Group. The group started as single
Babyshop store in Bahrain in 1973, but now has more than 840 stores with a retail
area of more than ten million square feet across the Gulf, Jordan, India,
China, Spain, Pakistan and Egypt.
In addition to retail, from children's fashion and footwear to cosmetics, the
group has diversified into leisure, food, hotels and electronics and its own
logistics and distribution. The group's turnover is $2.5billion and it
employs 24,000 people. Mr Jagtiani won the Retail Personality of the Year at
the third Annual Retail Middle East 2007 Awards
Other interests: Main philanthropic cause is LIFE - Landmark
International Foundation for Empowerment. It brings abandoned children and
the destitute elderly under one roof, providing schools, vocational training and
medical facilities for more than 100,000 people in India.
His hobbies are alternative medicine and collecting Buddhas (he has 95)
Family: married to Renuka Jagtiani. They have three children: their son
Rahul is studying; their daughters are Nisha, a business manager at
Landmark, and Aarti, in charge of Home Center in India
