RIYADH, Saudi Arabia Saudi-based bookstore and office supplies chain Jarir Marketing Co 4190.SE will hold off expansion plans in Egypt over the next two years to focus on a growing domestic regional market, boosted by sales in electronics, its chairman said on Tuesday.
Jarir plans to spend over 300 million Saudi riyals ($80 million) to open up to 9 stores in Gulf Cooperation Council (GCC) countries by 2013 said Muhammad al-Agil, who heads the family-controlled firm, at the Reuters Middle East Investment Summit in Riyadh.
"The growth will continue to be generated from Saudi and the rest of the GCC... (That) market is huge, but we will not exclude Egypt... Egypt is still on the plan but not for the coming two years."
In 2009 Agil said they would consider expansion in North Africa after 2012, with Egypt a primary target.
Last week Jarir announced plans to increase the company's capital by 50 percent to 600 million riyals from the current 400 million by issuing bonus shares. The capital hike will be used to support the firm's expansion plans.
"It will be used to open stores much faster. This year we opened two stores and the third is in the fourth-quarter and over the next year 3-4 stores and in 2013 we expect to open 4-5 stores," he said.
By August of this year Jarir had 30 stores in total, two of which are in Qatar, and one in Abu-Dhabi. It also plans to open two more stores in Kuwait in 2012, although most of its sales, around 90 percent, are generated from its local stores.
Jarir posted a 48.5 percent increase in its third-quarter net profit to 152.9 million riyals, from 103 million riyals in the same period a year earlier. Agil said he also expects the fourth-quarter to see double digit growth.
Jarir, which says it is the largest laptop retailer in Africa and Eastern Europe, above Turkey and South Africa, also sells books, smartphones and other electronic equipment as well as school supplies and arts and crafts tools.
But demand is driven by its electronics products, Agil said, adding that they expect to sell around 600,000 laptops and tablets by the end of the year.
"Demand is driven by growth in electronics, smartphones, tablets. We have a growth across the board but the smartphones and tablets have grown tremendously... Electronic growth was over 160 percent in the third quarter," he said.
($1=3.750 Saudi Riyals)
(Additional reporting by Marwa Rashad; Editing by Mike Nesbit)