Lulu Retail Holdings, a prominent hypermarket chain in the Middle East, has recently launched an initial public offering that could potentially be one of the UAE’s largest this year. With over 240 stores in the GCC countries, the conglomerate is taking advantage of the current retail spending boom in the region to go public. The IPO, which will offer more than 2.582 billion shares, is scheduled to run from October 28 to November 5, with shares expected to start trading on the Abu Dhabi Securities Exchange on November 14. While Lulu has not commented on the exact value of the offering, sources suggest it could raise between $1.7 billion to $1.8 billion for a 25% stake.
Founded in 1974 by Indian businessman Yusuff Ali, Lulu aims to maintain a total dividend payout ratio of 75% of annual distributable profits after tax, with dividends paid out twice a year. The company has reported strong financial performance, with first-half revenue in 2024 reaching $3.9 billion, up 5.6% from the previous year. Lulu’s annual revenue in 2023 also saw a 5.6% increase to $7.3 billion, driven by sales growth from existing stores, network expansion, and online channels. Core earnings for the first half of 2024 stood at $391 million, up 4.3% year-on-year, while annual core earnings in 2023 rose 7.2% to $753 million.
Lulu Group has established itself as the largest full-line retailer in the GCC by selling space, sales, and number of stores. With a strong presence in all GCC countries, the group operates 240 stores across various formats, including hypermarkets, express stores, and mini-markets. By August 2024, Lulu had 116 hypermarkets, 102 express stores, and 22 mini markets, serving over 600,000 daily shoppers. Sourcing products from 85 countries, the retailer has 21 distribution centers in the GCC to support its retail operations. The group’s total selling space was approximately 1.3 million square meters, three times higher than its listed peers in the region.
Yusuffali MA, the founder and chairman of Lulu Retail, expressed enthusiasm about the company’s growth and the promising outlook for the GCC retail sector. He highlighted the positive demographic and consumption trends in the region, driven by strong national leadership and economic growth. Lulu’s IPO marks a significant milestone for the brand, as it reinforces its position as a leading retailer in the GCC market. The company’s international sourcing network allows it to offer a wide range of products to meet diverse customer needs, with over 200,000 active SKUs available in its stores.
In terms of financial performance, Lulu’s revenues have been on an upward trajectory, reaching $7.27 billion in 2023, up from $6.89 billion in the previous year. The company plans to pay dividends for the six months ending on December 31 in the first half of 2025, demonstrating its commitment to rewarding shareholders. As Lulu continues to expand its presence and customer base across the GCC, the IPO offers investors an opportunity to be part of a successful and growing retail brand. With a solid track record of performance and strategic market positioning, Lulu Retail Holdings is poised for further growth and success in the region.
