Khalid Al Alawi, Deputy General Manager, Al-Khamis Trading Co. believes that it is important for family members to understand a business before handing it over to professionals
Can you give us a brief background of Al Khamis Trading Co.?
This business was established in 1973 by three partners – Mohammed Khamis, Rashid Khamis and Ali Khamis. They are my father and two uncles respectively. The business started as a shop in Muttrah where various items used to be sold, then after two years they moved into shoes as they felt that there was a need for such a product and the availability was less and the requisite quality was missing. In 1989 we started a workshop making Arabic sandals and in 1993 we started a manufacturing unit for manufacturing Arabic sandals in Rusayl Industrial Area. The factory started with a production capacity of 20 pairs a day and today has a capacity of 400 pairs a day. We then went into the UAE, and are dealing with companies from all across the world mainly from Europe, Brazil, India and China.
When did you join the family business and what kind of an induction process did you go through?
I joined the family business in 2001 as a trainee, moving onto becoming a sales supervisor in the sales department, from where I came to the top management. From 2001 till 2005, I essayed various roles in the company and then from 2005-2009, reaching upto the assistant general manager position. From 2009 onwards, I have been a DGM. I studied accountancy at the University of Hull in the UK. From the age of 12 years I used to spend all my free time at our store helping the sales team and learning from them. On my return from the UK, I started my career at the store. During the first seven years I did different roles getting a hands on feel of the entire process at the warehouse moving onto purchase, accounts and sales. Now I am in the top management of the company. Al Khamis Trading Co. is today managed by myself and my two brothers, along with my father and two uncles.
What has been the second generation’s contribution to the business?
The new generation has introduced new processes to the company like an ERP system that links all the stores with the point of sales. We have 23 stores in Oman and nine stores in the UAE including point of sales. We used to work with Tally, and our main challenge was our users, shifting a user from Tally to Oracle ERP based software was very challenging as we had to train them and explain to them how ERP works etc. We introduced a new system for inter store transfers, which includes a transfer of stock from store to store. The right stock transfers help in increasing sale. We have been doing these inter store transfers since 2005, prior to this every store had their own set of products, irrespective of whether they were selling or not there was no replenishment. This happens once every month and has helped our business to grow.
We have grown the business internationally, by sourcing new companies and dealing directly with manufacturers. This has also helped in getting better margins rather than going through agents. We have been doing this since 2003. We now research and develop styles based on customer feedback and involving the designer.
Have you noticed a change in customer preferences over the years and how has Al Khamis adapted to the change?
Yes definitely. Customers used to earlier buy fashionable or smart designs, but in the last ten years, there has been a change in preferences as they are now looking at fashion and comfort while earlier it was all about fashion. Keeping this in mind we introduced the comfort line in our factory and it has been the number one selling line since its introduction. Our plant in Rusayl has a capacity of 100,000 pairs per year. We presently sell in the GCC, Africa and Europe. We got into the GCC markets in 2001 and are have outlets in Dubai Mall and all the City Centre’s in Dubai.
The business is run by family members from different generations. How do you ensure that there are no clash of ideas or vision?
We ensure that things run smoothly through meetings and by making it clear to everyone that these are the plus points and negatives of a decision. In the beginning a meeting of minds was quite difficult, but over a period of time that trust got built. Once the previous generation is convinced that the next generation has enough experience to take decisions and they have learnt from their mistakes then it becomes easier. There is also a functional division of roles in the company with every department having its own head. I am heading the top management to whom all the divisional heads report to. I also take care of sales and accounts and I am fully responsible for these functions. My father keeps an eye on overall activities. Then there are meetings of the board of directors which is attended by all the stakeholders. At these meetings the monthly sales report, strategy etc. are discussed.
There is a saying that the first generation builds a business, the second generation helps it succeed while the third generation ruins it. How are you making sure that something similar does not happen to your family business?
If everyone in the family has their own responsibilities and duties, there should not be any clashes, as the responsibilities are crystal clear. The other way of ensuring continuity and success is by not having the family directly involved in business but by running it from a board level in terms of setting the strategy and allocating responsibility to every divisional head.
Are you looking at professionalising your business with family members moving onto the board level?
We have started the process. Once the family understands the real business this can be achieved. If family members do not understand the business and hand it over to professionals it may not help as they will not be in a position to understand or discuss matters with professionals in an intelligent manner. For example, if I do not know anything about shoe retailing, a professional may take a wrong decision, but because of my limited knowledge it may seem correct at that time. So family members need to understand the business by going through all the departments, the process and by attending meetings. Personally, I did not gain the trust of my father, till I got acquainted with all the processes in the business. I will be happy to move onto the board level as it will give me more time to devote to the company in terms of strategic inputs. We have started working towards professionalisation of our business.
Would you want the next generation to be involved in the family business?
I would like the next generation to be involved in the family business as long as it does not impede them from achieving their goals. That’s what we should do as the second generation, we should focus on the strategic side and look at different kind of businesses, right now as we are a part of this business and involved in day-to-day operations, it does not give us enough time to look at new opportunities or diversification.
What are your plans for the business in the years to come?
In terms of footwear retailing, we want to retain our position as the No.1 retail company in Oman. We also want to expand across the GCC with our own retail operations. We also want to get into fashion products, becoming a one stop shop for all needs related to fashion. We are going to open new stores only for sport products. In manufacturing we are looking at becoming a full cycle manufacturer of footwear, which means producing all materials required for producing the final product from tannery sole making to components.