Globally, these are tough times for retailers. The downturn has forced several big-name chains out of business. In its decision to expand through franchise partnerships, MH Alshaya is heavily exposed to the global economy and to the worldwide downturn in retail sales. The group has reined in its plan to open 430 new stores this year and now aims to add 230 new stores by the end of 2009. But despite the downturn, MH Alshaya has signed five new partnerships so far this year and continues to expand its existing deals.

Among its most ambitious ventures is a partnership with UK pharmacy group Boots, which plans to open up to 200 shops across the Middle East within five years.

MH Alshaya is also the first franchise partner of Swedish budget fashion chain H&M, a wise partner choice in the light of the ongoing credit crunch. H&M owes its phenomenal growth in Europe to selling low-cost fashion wear with a high turnover of stock, keeping abreast of the latest fashion trends. Alshaya has so far launched H&M stores in Kuwait, Dubai, Qatar and Egypt.

Alshaya has gone through recession before. In the late 1990s, it closed 50 stores in 12 months. While the short-term outlook is bleak for retail worldwide, the company is positioning itself for mid-to-long-term growth in the Middle East and Eastern Europe.