Almost a year after its privatisation, Omar Effendi is regaining its glory, reports Sherine Abdel-Razek Spacious, with more than 75,000 neatly displayed items including clothes, electric appliances, household products and fitness equipment, as well as a supermarket in the basement and a coffee shop for a quick caffeine injection amid one's shopping tour. Welcome to one of Omar Effendi's newly renovated stores. One year after its controversial exchange into private hands, the company last week celebrated the overhaul of 30 out of the 82 outlets nationwide. The Omar Effendi brand name is now carrying a new cool blue logo. With its new look, the stores gained back some of the luster they enjoyed at the turn of the century when Omar Effendi was a cosmopolitan retailer rivaling high street stores in Paris, New York and London. At the time, well-to-do foreigners living in Egypt patroned the stores and were overwhelmed by the goods as well as the breathtaking architecture. This was especially true at the branch located on Abdel-Aziz Street, the first ever Omar Effendi outlet built in 1856, with its Italian design with only one peer in Paris. However, the years following its nationalisation in the late 1950s saw the high street diva change into a mismanaged loss-making public department store with a congested payroll. The shopping experience there was anything but pleasant, with a layer of dust covering displayed items, very reluctant-to-help salespeople and surprisingly higher prices than some privately- owned retailers. After four failed privatisation schemes beginning in the 1990s and 10 months of controversial sale negotiations which began in mid-2006, the Saudi retailer Anwal Group finalised the purchase of Omar Effendi in February 2007. In the meantime, the government had come under fire from the media and members of parliament with accusations of squandering public money. But Anwal purchased a 90 per cent stake in Omar Effendi in a whopping deal worth LE744.5 million, in addition to a promise of injecting LE400 million in investments to settle outstanding debts, as well as giving the entire department store a facelift. Early this week, Omar Effendi held a news conference where its senior management boasted the fruits of the first year. "We did an amazing job in one year," stated Arnaud Mailhe, Omar Effendi's chief executive officer. "We injected LE250 million in investments for renovations, finalised 25 new commercial contracts with suppliers and recorded a monthly sales figure of LE20-25 million in one year." The overstaffed payroll of Omar Effendi also looks better now. Around 2,500 workers left the company in early retirement packages on two phases. Essameddin Hassan, Omar Effendi's director of human resources and administrative affairs, recently explained to the press that according to the purchase contract Anwal had to offer early retirement plans to up to 1,200 senior employees and this was finalised by May. However, 1,300 more workers decided to follow suit by voluntarily applying for early retirement. "Retiring employees in both phases were fairly compensated," Hassan explained. They each received a full retirement package, in addition to payment of salaries of accumulated holidays they did not take through their tenure -- a privilege that was not stated in the deal. The overall cost of the schemes came at LE50 million. The new management, he added, would no longer accept applications for early retirement because it cannot spare any more employees. "Early retirement is no longer acceptable, and those who want to leave will have to submit their resignations," Hassan stated. Meanwhile, the company recruited 400 new employees in the past year. Accompanying journalists to a room at the Adli Street branch with a classroom setting furnished with comfortable leather chairs, Hassan proudly boasted that store employees are now taking extensive training courses to polish their skills. In the future, the company plans to set up an academy for training retailers, he added. Last week Mailhe asserted that the existing employees have also benefited financially. "Compared to a year ago, employees have a 12-22 per cent increase in the net value they get in their pockets, including salaries and selling commissions," he said. However, a salesman in his 40s denied that he benefited anything from the renovation except for the new blue uniform that bears the Omar Effendi logo. The man, who preferred to remain anonymous, said that his salary is "the same as before privatisation, and we did not go through any training." He added that newly-appointed staff enjoy better financial treatment. "My salary is LE235, while new colleagues get LE800." Sherif Sabry, chief financial officer, responded that now the bonus is linked to performance. "Those who achieved high sales figures has almost doubled their commissions, and I challenge that the commission of any worker has dropped through the past year," Sabry told attendants of the press conference. "On the contrary, they all increased at different levels due to increased sales." Omar Effendi sales stand at LE20-25 million per month, and while the management plans to double it during this year, this figure is by far better than when the store was state-owned. With new products lined up, current goods and new suppliers contracted, consumers will find a wide range of products -- or as their motto states: kol ely nefsak feeh (all what you crave). The wide-ranging overhaul included internal design, refurbishing, façade facelifts and automating the stores to link them with warehouses in an electronic database network. Part of the renovation costs were financed by a $40 million loan extended by the World Bank's International Finance Corporation (IFC), which also now holds a five per cent stake in the department store. Omar Effendi expanded its line of products to include a wider range of merchandise from clothes, furniture, carpets and heavy-household equipment, to mobile phones, computers and even books. The store finalised agreements with Metro Supermarket, i2 mobile shop and Etisalat to rent space to display their products. "We approached new suppliers, we have the furniture manufactured by small workshops in Damietta, and we also rent space to other furniture stores," noted Sherif Abdel-Wahab, a commercial manager at Omar Effendi. Abdel-Wahab was touring the four-storey outlet on Makram Ebeid Street with media representatives. "We look for the competitive edge and prices." For example, while other retailers buy products from distributing agencies, his store buys them directly from the manufacturers, mainly locals, Abdel-Wahab said. "As a result, we have prices that are even less than the stores on Abdel-Aziz Street, Downtown." The street is famous for selling electrical appliances at very low prices. He further explained that store locations dictate the type of goods on display: "I will not display a washing machine with a dryer in areas where the majority of customers have limited income," noted Abdel-Wahab. The company also established a new finance scheme allowing customers to purchase commodities in instalments offered through Audi Bank. A customer in her early 30s sampling the clothes department said that Omar Effendi has for a long time been associated with low quality of merchandise, especially the readymade garments. In fact, she would have been embarrassed to tell her friends that she bought her clothes from there. Today, holding a jeans skirt with a price tag of less than LE100, she says it will be a different story now since the quality is good and the price is in the same range of products in Careffour and Spinneys. "While these stores are prominent retailers, Omar Effendi has the privilege of being everywhere," said Abdel-Wahab. With 82 stores nationwide, covering 200,000 square metres of displayed goods, it does seem unlikely there will be a neighborhood without an Omar Effendi outlet just around the corner.
