In considering whether to acquire a new franchise for mid to high end Home Furniture & Accessories and to open a showroom of 2500 – 3000 m2 in a retail Mall, the owners of a Department Store approached NECG to conduct a preliminary market survey aimed at understanding the economics and competitive dynamics for the “Home Furniture & Accessories” market in Lebanon.
In parallel, the Client engaged NECG to conduct the same study for the “Bricolage” market in Lebanon.
The main objective of each study was to provide the Client’s top management with the required information to reach final decisions to acquire the franchises or not.
NECG’s scope of intervention consisted in the following steps:
Segment the market in Lebanon and assess its demand and offer situation.
Determine the economics of the targeted segment: current sales per m2, sales evolution, gross margins/ net
margins, discount levels, credit facilities offered and working capital intensity, operating expenses, etc.
Assess the competition of the targeted segment: Intensity and nature of competition (local production vs. imports), barriers to entry, room for new players, etc.
Survey prevailing rents charged for such stores in areas of relevance to the projects and at existing or planned new malls.
Identify market trends (e.g. opening showrooms inside malls, granting credit facilities, etc.) and opportunities.
High-light key factors required to ensure the success of the project
In order to perform the above, NECG relied on (1) primary data gathered from field interviews with key mall operators, retailers and consumers in the market, and (2) available data from secondary sources.
