Kuwait Conglomerate to Cut Egypt Operations as Economy Struggles
(Bloomberg) -- Kuwait-based retail franchise conglomerate Alshaya Group is curbing its operations in Egypt, citing “difficulties faced by overseas businesses” as the North African nation confronts its worst foreign-currency crunch in decades.
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Alshaya, which runs local outlets of brands including Starbucks, Victoria’s Secret and H&M, will close 60 shops and lay off around 375 employees, it said in a statement to Bloomberg. The brands affected are The Body Shop, Mothercare, Debenhams, Pinkberry and Claire’s, according to an Alshaya spokesperson.
“As a result of the economic situation over the last three years and the difficulties faced by overseas businesses trading in Egypt, we have taken the very difficult decision to reduce our operations in the country,” Alshaya said in the statement. It didn’t give further details.
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The closures spotlight the challenges businesses face in Egypt as officials struggle to revive a battered economy that’s seen three devaluations of its pound since early 2022. The government is in talks to potentially double a $3 billion International Monetary Fund loan program.
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Foreign currency is in short supply, with some Egyptian banks sharply limiting overseas transactions. While the pound has held steady at an official rate of about 30.9 to the US dollar for much of the past year, it’s edging closer to double that on the black market.
Alshaya said it remained committed to Egypt and looked “to continuing to trade and hopefully growing again in the near future.” It will retain a total of around 100 stores, including 79 Starbucks branches, the spokesperson told Bloomberg, declining to be identified in line with company policy.
Established in 1890 and believed to be Kuwait’s oldest company, family-run Alshaya is one of the Middle East’s largest operators of popular retail brands.
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