Saudi Arabia: Feminization of shops to blame for SR800m loss

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Published — Tuesday 11 March 2014


Businesses have lost an estimated SR800 million because of the government’s feminization program, a member of the Jeddah Chamber of Commerce and Industry (JCCI) claimed on Monday.
The claim comes as the Ministry of Labor launched the third phase of its feminization program covering shops selling women’s bags, shoes, perfume and clothing; and said it would punish those failing to employ Saudi women.
Mohammad Al-Shahri, chairman of the JCCI’s textile and clothing committee, said 25 percent of small and medium-sized shops have shut down, while many others are considering pulling out of the market.
Al-Shahri said the feminization program has affected large and small businesses. He said many businesses closed because of high costs, including the expense of employing women for two shifts at double the salaries of expatriates, rising rents and the levy imposed on companies under the Saudization program.
He said committee members and merchants are not opposed to the feminization program but have found it difficult to implement it. This has resulted in many businesses losing money and closing down, he said.
Al-Shahri said the Labor Ministry should have discussed the program with businesspeople before introducing it, to give them enough time to express their views and concerns.
It is estimated that 25 percent of small and medium companies make up 80 percent of the market for female clothing.
Some merchants working in the clothing sector agreed with Al-Shahri’s comments.
Mohammad Hakim, who has 35 stores selling readymade clothes, said he had to close down 10 lingerie shops because he could not find women workers. These stores were in Al-Makarona complex in Jeddah on the main road.
He claimed he lost SR2 million. He estimated that 30 percent of stores that sold women’s clothing had closed down permanently.
Hakim said women should undergo training for a period of three months before being employed on a permanent basis. He called on the ministry to slow down the process of feminizing shops.
Ziyad Al-Bassam, chairman of the JCCI board, has welcomed the feminization program as positive for the industry because it allowed many women to set up their own small and medium businesses.
Al-Bassam said the JCCI is ready to train and support women in various sales professions.
Mahmoud Maqsood Khan, an investment and human resources consultant in the Gulf region, said the ministry did publish its proposals on feminization on its portals, “Bawaba” and “Together,” for businesspeople to consider.
Fahad Al-Takhifi, assistant deputy minister for development, said government was determined to implement the feminization program. He said the ministry had given businesses enough time to gradually implement the program.
He said the ministry would punish those who do not abide by the new labor laws. “We will not be lenient with those who fail to implement the Saudization of lingerie shops and will continue our inspections of such stores across the Kingdom.”
In a statement on the launch of the third phase of the feminization program, he said the ministry’s inspectors have taken action against 1,173 shops that had violated the regulations.
He said the third phase would cover shops selling women’s perfumes, maternal care goods, shoes, vanity bags, readymade dresses, women’s clothing and dressmaking materials.

Categories: Arab World, Asia, Saudi Arabia

1 reply

  1. The headline is not quite correct. The losses are not exactly due to the ‘feminization’ but due to the ‘nationalization’. (Cheaper foreign labor replaced by local labor). Even if Saudi men would do the job they would also be more expensive than imported Asian labor.

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