Photo of Philippe Robert, HSBC and Fabio Sarao, BNP Paribas accept the award on behalf of Chalhoub Group.
With this solution, Chalhoub Group now has a treasury that can support the company through the various economic challenges and “new normal” that has been developing in the local Middle Eastern region. In hindsight, the timing of this treasury solution was ideal and permitted a high level of support that would not have been possible just a few years ago.
The Chalhoub Group is the leading partner for luxury across the Middle East since 1955. As an expert in retail, distribution and marketing services based in Dubai, the group has become a major player in the beauty, fashion and gift sectors regionally with a growing workforce of more than 12,000 people, in 14 countries, and operating over 600 retail stores.
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Value-added ‘advisory/in-house bank’ treasury model chosen by this family business
Historically, Chalhoub Group’s treasury activities were decentralised, reflecting the culture and development of the local market. However, rapid growth had made the decentralised treasury activities less sustainable due to poor visibility of cash balances and risk exposures, limited opportunities for economies of scale and no central policies. The solution was to establish a central group treasury function with responsibility for managing these key activities.
The initial phase of the treasury implementation took place in 2014, after a thorough assessment of the existing situation and an ideal target operating model was drafted with the group’s advisors and partner banks. This delivered many quick benefits to validate the business case. However, it was recognised early on that the ideal solution would be a journey rather than an overnight project, with a three-year strategic plan to achieve the desired best in class treasury solution. The plan was successfully completed during 2017 and covered the following areas:
To provide a world-class, centralised treasury service to the group.
To provide robust control of the group’s cash and liquidity.
To ensure a sustainable framework for financial risk management: liquidity, cash, FX, funding, interest rate and counterparty.
To ensure the business has adequate mid to long-term funding to achieve its strategic and commercial goals.
To generate tangible added-value for the group.