In November 1988, less than a year after the Abu Dhabi outlet opened, the flagship Alukkas store was inaugurated in Dubai. Given that the Abu Dhabi store was doing reasonably but not spectacularly well, why did I hurry to open a second store? Therein lies a tale of betrayal, hurt and a determination to turn adversity into opportunity.
The story began with an advertisement in Gulf News in September 1988. By that time, we had been in business in Abu Dhabi for a little over eight months. And the ad in question was aimed directly at us.
‘Customers should beware when they buy gold from Abu Dhabi, Abu Dhabi gold price is higher,’ read the headline. It was correct. Certainly, the gold price in Abu Dhabi was higher. On the other hand, if a customer chose to purchase their jewellery in Abu Dhabi rather than make the trip to Dubai, why would anyone have a problem with that? It just didn’t make sense that someone wanted to go after my business for no apparent reason.
I had to find out who had put out the advertisement. I got in touch with a gentleman from the ad department of Gulf News and learnt the identity of the person behind the offending ad. It turned out to be none other than George Varghese, my adviser and mentor. To me, the blatant attempt to undermine my business felt like a breach of trust. It was my Judas moment.
Clearly, Chemmanur Jewellers had lost out on customer traffic coming from Abu Dhabi. In other words, I was ‘blocking’ their sales. The fall in sales figures had prompted Varghese to take underhanded action. Why had he encouraged me to open a store there in the first place? Was it because he had not wanted me to set up shop in competition with him in Dubai? Was that why he had generously extended credit to me when no one else would? Ironically, Alukkas had become a competitor anyway, by eroding his Abu Dhabi customer base!
Hurt and angry, I tossed and turned all night, and at five the next morning, I drove from Abu Dhabi to Dubai. I was determined to confront Varghese. I parked outside his store and waited for him to arrive. Fortunately, I had reached well in advance of opening hours, so I had plenty of time to work through my anger.
Once I had cooled down, I began to think more rationally. I asked myself, what do you do when someone draws a line in the sand? Do you erase that line, or do you draw a longer line instead? I decided that the latter was a better course of action. I would not lock horns with Varghese; instead, I would vindicate myself by beating him at his own game.
A strategy clicked into place in my head. I decided, then and there, to open a store in the exact same building as Chemmanur Jewellers. Varghese had chosen to undermine me. I would now turn the tables on him, without making it seem like a direct confrontation. That would be better use of my creativity and energy. My anger and frustration dissipated, and I found myself infused with diamond-hard determination.
Standing outside the building which housed the Chemmanur store—the Gold Central Building of the Dubai Gold Souk in Deira—I made a mental map of its geography. Varghese’s outlet was on the mezzanine floor, with a staircase leading up to it. On the ground floor next to the base of the staircase was a Lee Jeans showroom. That, I told myself, is where I will open my jewellery store.
I could see that there were other vacant shops on the ground floor, but this one was uniquely located. It was at the centre point of the main passage, which was open from two sides. The store and its signage would be the first thing that any visitor walking into the Gold Souk would see. Customers heading up to Chemmanur Jewellers would be confronted by the Alukkas showroom even before they stepped onto the staircase.
Other than the Lee Jeans showroom and the vacant spaces, there was a cafeteria, a supermarket, a video cassette library, a stationery store, a shoe store and a small shop selling tailoring materials. All of these were on the ground floor, and would contribute to footfall. Chemmanur’s competition, Elite and Vijaya Jewellery, were on the mezzanine floor.
I gathered that only the ground and mezzanine floors were devoted to commercial establishments, whereas the rest of the building was residential, occupied for the most part by expats from Gujarat. Today, the entire building is commercial and is at the heart of the gold trade, with several companies having their offices there.
I made inquiries about the availability of the Lee Jeans showroom. The owner was an Iranian, and he was willing to let it go for the grand sum of 1,00,000 dirhams. This amount, referred to as ‘pagdi’ in South India and ‘key money’ in UAE, was basically the premium paid to acquire a good location from an existing tenant. It was a hefty sum, which I later learnt had broken existing records in terms of key money.
That morning, I registered the contract for the shop in my name. In the afternoon, even before the ink was dry on the documents, I met George Varghese and informed him that I was opening a second store, in Dubai. I showed him the advertisement in Gulf News, but did not mention that I knew who was behind it. It was only then that I informed my brothers of what I had done. My father, when he heard that I had taken a space in the Gold Souk, was delighted. ‘Nannayi’ (well done), he told me in Malayalam. This was the first time that my father had voiced his appreciation for a job well done.
My experiences in Abu Dhabi held me in good stead in terms of getting the Dubai store off the ground. On the personal front, Jolly and I were blessed with our first daughter, who was born at Abu Dhabi’s Corniche Hospital on 30 August 1988, the day after Jolly’s birthday. She was named Mary, after Jolly’s mother. I was thirty-two years old at this time—the proprietor of two stores, father of two children and bearer of the Alukkas standard in the UAE.
Rules and regulations were different in each emirate, but I managed to get the approvals in a few months—no mean feat in Dubai. I called upon my sponsor, Jassim Al Hasawi, to inaugurate the showroom. The Dubai store was a calculated risk on my part—a leap of faith, as it were—and it paid off handsomely. I learnt that in brick-and-mortar retail, three things are important: location, location, location. The Dubai showroom stands as an enduring testimony to my innate instinct for ideal locations.
This excerpt from Spreading Joy by Joy Alukkas with Thomas Scaria and Nidhi Jain has been published with permission from HarperCollins India.