Chalhoub Group

ABOUT THE FOUNDER

Michel Chalhoub was born in Damascus^[2][3] to a prominent Syrian family in 1931.  After graduating from high school, Michel attended law school, where he made friends with classmates who traveled between Paris and Damascus. Michel grew fond of the French luxury objects to which they had access and saw a business opportunity in introducing them to Syria.^[4] In 1954, at the age of 23, Michel quit law school to pursue his business idea.^[5] Around this time as well, he married Widad Mireille Marie (Mazloum),^[6] with whom he had two children, Anthony (b. 1955^[7]) and Patrick (b. 1957).

FOUNDING STORY

Michel’s friends provided him with contacts in Paris, whom he worked with to open one of the first Western tableware boutiques in Damascus in 1955, together with his wife.^[8] They licensed the rights to sell three luxury French brands:^[9]: Baccarat, the fine crystal manufacturer; the Jean Patou fashion house; and Christofle, the goldware and silverware company. During this period, however, Syria was seeking to restrict imports into the country to “protect its agricultural and industrial production, as well as its international solvency.”^[10] The situation in Syria became even more difficult for the Chalhoubs in the early 1960s^[11] following the coup d’état and subsequent political instability.^[12] In the mid-1960s the Chalhoub family moved its operations to neighboring Lebanon.^[13]

GROWTH PHASE

Lebanon’s economy during this time was far more laissez-faire than that of most other countries in the region. The government maintained low tariffs on imports and mandated import licensing on just a few agricultural products.^[14] Since the beginning of his entrepreneurial journey, Michel Chalhoub strongly believed in the growth potential of the Gulf region.^[15] To tap into the market, he reached out to contacts in Kuwait. As national regulations required him to have a local business partner,^[16] in 1967, he built a partnership with a Kuwaiti businessman that would prove to be beneficial a decade later. In Lebanon, meanwhile, there were growing political tensions. The sectarian government system the country adopted ultimately led to a civil war in 1975.^[17]

As soon as the civil war broke out, the Chalhoub family decided to move their operations once again — this time to Kuwait.^[18] The new headquarters location reflected the family’s desire to further grow their business in the Gulf, taking advantage of the partnerships they had established.

Shortly after the 1975 relocation, Anthony Chalhoub, Michel’s oldest son, joined the Chalhoub Group, which now had 30 employees. This was a pivotal year for Kuwait as a whole, because it marked the nationalization of Kuwaiti Oil.^[19] As a result of the oil boom, Kuwait’s per capita income soared to among the highest in the world,^[20] and the Chalhoub Group’s fortunes grew enormously. In 1979, Michel’s second son, Patrick Chalhoub, joined the Group, with now 100 employees, at the age of 22.^[21]

The group opened Tanagra, their own concept store, in 1980 and it became one of their most successful stores to date. Three years later, they opened the very first Louis Vuitton boutique in the Middle East in Kuwait. In 1989, they opened Faces, another concept store that was an immediate success.^[22] At the same time, Kuwait’s territorial disputes with Iraq were becoming increasingly heated and on August 2, 1990, the Gulf War broke out. Thousands of lives were lost and Kuwait’s infrastructure suffered massive damage.^[23]

The Chalhoub family immediately fled Kuwait and in 1990 re established their headquarters for the third time — now in Dubai. This proved to be a great location for the headquarters of a luxury retail business as Dubai was beginning to market itself as a luxury tourist destination.^[24] The Chalhoub Group were able to play a part in the city’s commitment to building their luxury lifestyle image from the very start. This gave the Group a vital first mover’s advantage, facilitating their growth into one of the biggest luxury retailers in the country and, eventually, the entire Middle East. The Group maintained good relations with the Dubai government while launching new joint ventures with international brands and continuing to expand their line of concept stores. In 2005, Chalhoub expanded their operations to India, where they occupy 15 percent of the luxury cosmetics market today. Despite that impressive level of success, Patrick has said that the Indian market is still not ideal for them, but that they are in it for their grandchildren.^[25]

Michel Chalhoub, who was nicknamed the “Wandering President,”^[26] resigned from his position as CEO in 2001. His two sons took over as co-CEOs and Michel became Group chairman. In 2018, Anthony Chalhoub died at the age of 63 after battling cancer,^[27] leaving Patrick as the sole CEO. In 2021, Michel Chalhoub passed away.^[28] Today, the Chalhoub Group’s board and executives are primarily non-family members, but the company remains a fully family-owned business^[29] and has no plans to go public.^[30]

TODAY

As of 2022, the Chalhoub Group comprises over 125 companies, affiliates, and joint ventures and has over 650 retail outlets in 14 countries.^[31] It has approximately 11,000 employees worldwide, mostly in the UAE.^[32]