AlShaya Group trims Egypt operations due to economic conditions

CAIRO (Reuters) – Kuwait’s AlShaya Group said on Thursday it was scaling back operations in Egypt where it holds franchises for prominent Western brands such as Starbucks and H&M because of the economic situation in the Arab world’s most populous country.

Economic challenges over the past three years have prompted it to take “the very difficult decision to reduce our operations in the country,” the company said in a statement to Reuters.

“We can confirm that, regrettably, this includes a reduction in the number of stores that we operate in Egypt,” it added.

AlShaya holds franchises in Egypt for brands including Debenhams, Mothercare, H&M, Starbucks and The Body Shop. It did not comment on which stores it would be closing or when they would shut.

Staff at branches of department store chain Debenhams and Mothercare, which specializes in products for expectant mothers and young children, in the Cairo City Festival Mall said they had signed resignation letters this week and that the stores were expected to close in the coming weeks.

Egypt has been grappling with a chronic shortage of foreign exchange exacerbated by the knock-on effects of the war in Ukraine, and high inflation. Many businesses have been affected by difficulties importing materials and accessing foreign currency.

Alshaya said it had been in the Egyptian market for 18 years.

“We are committed to the market and look forward to continuing to trade and hopefully growing again the near future,” it said.

(Reporting by Fraah Safan and Aidan Lewis; editing by Jason Neely and Bernadette Baum)