Innovation and Entrepreneurship
Case Study: Azza Fahmy and Egyptian JewelryPublished: May 14, 2009
"It happened in 1974, at the first Cairo International Book Fair," remembers Azza Fahmy, an Egyptian jewelry designer and entrepreneur, in her book, Enchanted Jewelry of Egypt. "As I stood leafing through an illustrated book on mediaeval European jewelry, new vistas seemed to unfold before my eyes: a world of beauty, art and intricate craftsmanship. I paid my month's salary to purchase the book." She inquired about becoming a jewelry designer and maker, eventually meeting Osta Ramadan in the gold and silversmiths' quarter of the Khan [market]. He accepted her as an apprentice. Said Fahmy: "I tied my hair back, put on my overalls and spent my days in a workshop full of men learning the tricks of jewelry making."
Entrepreneurs often lack the encouragement of their social environment. Moreover, Egypt is a country that scores lower on many indicators of social development than other countries in the Middle East and North Africa. Fahmy's mother cried when she decided to go out on her own. "My family was not very supportive at the beginning because they could not quite understand what I was doing, but I was very confident about my work," Fahmy told the Arab News in April, 2008.
Confident enough to grow a small empire. Today, Azza Fahmy is a $4 million company, with some 165 employees, boutiques in Egypt, Dubai and Jordan, and retailing agreements in Quatar, Bahrain, Dubai and the United Kingdom. About a third of sales are exports, and another third are sales to tourists visiting Egypt. Her collections include gold, silver, precious, semi-precious stones and fashion jewelry, with pieces selling from $100 up to $40,000. The company makes about 11,000 pieces each year, at an average price of $330. In 2007, the Financial Times chose Fahmy as one of the 25 most influential businesswomen in the Middle East. As of 2009, Azza Fahmy sold four product lines: culture, exclusive, fashion, and gifts & men.
No Ordinary Path
"My new experience was out of the ordinary for any conventional, young Egyptian woman in a traditional environment, but I was determined to go on," she told Al-Ahram Weekly Online in 2001. Fahmy, who was born in the southern governorate of Sohaj, graduated from Helwan University in 1965 with a degree in ornamentation and decoration. The British Council gave her a fellowship to study at the City of London Polytechnic School, where she sharpened her design skills.
In 1974, Fahmy organized her first exhibition and decided to become self-employed. The economy minister, a friend, recommended her for a bank loan of 15,000 pounds (a similar amount in dollars at the time). Her first shop opened in 1981 at theEl-Ain Gallery in Cairo's upscale Mohandiseen district, in collaboration with her sister Randa, a designer of Islamic metalwork and lighting, and her then husband, the architect Nabil Ghaly. In 1997, she opened the Azza Fahmy Boutique in Maadi, a suburb of Cairo, followed by another store in Heliopolis. There are now five Azza Fahmy boutiques in Cairo alone. Her customers have included the Saudi, Kuwaiti and Jordanian royal families. She opened a spacious factory in 2003 in the Sixth of October District of Cairo, not far from the great pyramids of Giza.
By the early 2000s, Fahmy realized that the necessary organizational and financial controls were not in place. In 2004, she decided to focus her energies full-time on design and to appoint an outside manager with experience at a multinational firm. He lasted a couple of years on the job, as he became increasingly frustrated by the lack of systems and organization. Fahmy then turned to her daughter Fatma Ghaly, appointing her managing director. Her other daughter, Amina, assists her with design, and has recently taken full responsibility for the fashion line and the company's St. Valentine's collection.
A Tight Ship
Ghaly took on the task of restructuring the business. Horrified to find that 18 different managers reported to her, she called on high school friend Nadine Okasha to become organizational development manager. Okasha proposed a structure in which four key managers report to Ghaly: operations, marketing, finance and organizational development. Production is a highly stratified department, following the Ottoman tradition of jewelry making. At the top of the occupational pyramid are four masters. The workers are highly skilled, and are aided by the apprentices and their helpers. In addition to top management and administration, women work in the warehouse, raw material area and beading room.
Ghaly runs a tight ship. Design meets with marketing every Tuesday. Management meetings move easily between Arabic and English, though when the retail manager is present, English tends to dominate, as he is Turkish. All internal email communications are in English. The incentive structure, linked to performance, is clear and effective.
While the company faces very little competition in its culture and gift lines, competition is stiff in the exclusive and fashion lines, especially from international firms such as Tiffany and Dior. The company's role model is Bottega Venetta (part of the Gucci group) because it has managed to "grow without becoming mass," says Ghaly. While the business occasionally goes to court to challenge copycats, it regards imitation more as a sign of success than a threat.
Ghaly strongly believes that product diversification and international expansion are the best strategies for growth. The company is thinking and planning for a leather line of wallets and potentially purses, and for a pen and watch collection. Silverware is also a possibility.
Fahmy faced significant challenges when taking her jewelry internationally. "It's so different. In Britain and in the U.S., women don't like the big jewelry that we do in the Middle East. Once again, one has to understand what they -- the customers -- like," she told the Arab News in April, 2008. The company has partnered with designers like the United Kingdom's Julien Macdonald and adapted its jewelry design to appeal to various countries.Is the Azza Fahmy business prepared to undertake growth on a truly global scale? Should it focus its efforts on product diversification or on international growth? As the management team considers the options, workers meticulously put the final touches on the new collections. The company's strengths lie, after all, in design and craftsmanship.