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 Dubai-based events company 9714 is shutting up shop, its founders have announced, along with its associated wholesale and retail businesses.
The company, which was behind events for brands including Emaar, Virgin, BMW, MTV (and so on), has effectively closed down its operations, settled its commitments, wrapped up its trading entities and seen its principle staff disperse to other ventures.
So is this the end for 9714? Another victim of the economic grimness?
Not quite.
Although the company has wrapped up its operations, it has done so in a more orderly fashion than most, apparently leaving no debt, and still in possession of its trade licence. Although the company is in stasis at the moment, its founders haven’t ruled out a revival of the brand at a later date.
“We’re saying we’re on a sabbatical, while we decide if or how we’re going to bring it back. There are no plans for bringing it back yet.,” said Saadia Zahid, a partner in 9714, and managing director of Kitsch22, the events company’s holding group and wholesale division.
“Right now we just need to shut down to operations to get to grips with what’s happened, and come back to it with a fresh perspective after the summer.”
What happens then is anyone’s guess, it seems. According to Zahid, the partners haven’t yet discussed what will happen to the 9714 brand, along with its siblings. Zahid herself believes 9714 at least will be back, but probably not as an enterprise aimed for profit.
“I see it coming back. Let’s say there’s something happening in Art Dubai, they need a company to throw a party... Anything culturally-related. I don’t think it will be about making money, and I don’t think it will be about being a company – it will be a platform to support the creative community, with our database, our knowledge, our services,” she said, while emphasising that no-one has made any decisions yet.
The reasons behind 9714’s decision to shut down are complex, and only marginally due to the current recession. In fact, according to Zahid, the recession may have contributed to being able to wrap things up in a managed way.
A key part of 9714’s current faux-end was its decision to diversify into fashion retail, after making a success of both its events business and its distribution of brands including Paul Frank, GSUS Industries, Fidel and Loop!
“We expanded into retail very aggressively. As a small company which was growing, our wholesale business was doing really well across the region, so was 9714 and [retail operation] five green, and it just made sense for us – those were the next steps to grow,” said Zahid.
The next step was Heaven’s Playground, a fashion store in Dubai’s Wafi mall – and this is where things started to go wrong.
Zahid explained: “On paper we were in the ideal location, between Starbucks, Topshop and Gap Kids, and at the top of the escalator – textbook-wise, a perfect location. No-one went there.
“We ended up losing a lot of money by keeping that store open for a year. And Wafi was great, but there’s only so much you can do.”
Next came the group’s Paul Frank store in Festival City. And again, it had to contend with low footfall for the first year, while the mall found its feet. By this year the store had picked up substantially, but the damage had been done, and the group’s cash had been drained.
“We started shutting down the stores to try and save the events business, because it was all under one company. Then we decided to shut down the wholesale business and just focus on 9714,” said Zahid.
“9714 has been doing really, really well, compared to other companies. Since the start of the year we’ve been rolling out loads of events, but we just didn’t have enough cash in the bank to survive the summer,” she added.
The effective end for the events business came in the last few months, when the firm failed to pick up any business at all for the summer, prompting 9714 principle Ben McDonald to have a hard look at the books.
“As soon as we didn’t get those pitches, Ben started working out what it’s going to cost us to stay open, and what if we had to close three months down the line and not now. And if it was three months down the line, we would be in debt,” explained Zahid.
“So we just had to make that decision overnight, and it was like: ‘Guys, if we don’t shut down now, we’re going to be in debt.’”
But ironically, had the company been more successful – especially with its proposed Paul Frank store in Dubai Mall – it would have faced much bigger problems, and according to Zahid, would probably not have been able to shut down smoothly.
“Something happened with Emaar and they took [the Paul Frank store] away from us. At that point we were really hating on Emaar, but thank god we lost that space – if it had opened, we would have just been ruined. We got really lucky,” she said.
Zahid estimates the fit-out alone would have cost Dhs1 million – and would have been fatal for the company’s cash-flow.
Of the downturn, she said: “I think it’s all been a blessing for us. Luckily we recognised that things were falling apart on time, and did something about it. If we were doing well, out-of-control growing, when the market crashed we would have just been so screwed. Luckily we were ahead of the curve and had problems anyway, and started to shut down.
“At least we’re not in debt. Thank god. All the people in the company are Dubai born and bred, their families are here, this is home. We’d hate to have to end up in a situation where the only option is to run. So we’re luckier than most,” she added.
The various players behind 9714 have now drifted off to other ventures – Zahid herself is now curator at Shelter, Dubai’s new(ish) space for creative types. Other 9714 principles are staying in events or heading back to college, but everyone is still in touch.
When asked what they would do differently if they could go back in time, Zahid makes the obvious point of sticking with just the events and wholesale businesses, and steering clear of retail – but also emphasises that, at the time, it was the logical move for the firm, despite the inherent risk.
Unfortunately, as she also points out, Dubai is not particularly risk- or small-business-friendly – and this is something she hopes will change, following the downturn.
“What we’re looking forward to with this whole situation is helping Dubai – at least Dubai – recognise that they need to change and adapt their laws to be more realistic. There’s no laws to protect anyone – people are going to run, there’s no-one to pay anyone off. At least with bankruptcy laws, there’s scope for compromise. You figure out a way,” said Zahid.
“There’s people out there who are in jail for bounced cheques, who can’t get out to try to earn money to pay to be able to pay off what they owe. If they’re in jail, what are they going to do?”
Despite her sanguine approach to wrapping things up, Zahid is clearly upset by the need to close up operations, and says with feeling: “It’s been really tough.”
We, along with much of Dubai’s creative and fashionista communities, we would imagine, will be waiting for news of What Happens Next to the 9714 brand with great interest. Zahid and co expect to know more after the summer, but in the mean time, things will remain in stasis.
“It’s fine, though,” concludes Zahid. “It’s been fun.”
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