Entrepreneur Paul Gauci is consolidating his diverse business interests by bringing them under the umbrella of PG Holdings, a holding investment company.
Many local business people would go on to achieve greater things if only they had a larger market
The publicity-shy businessman best known for bringing the Zara brand to Malta told The Times Business he had, over the past few months, rearranged the structure under which his interests fell.
Self-made and old school, Mr Gauci, 56, is a veritable grassroots businessman at the helm of a group turning over €1 million a week and directly employing some 350 people.
Mr Gauci may not be as easily recognisable as some of his peers, but the investor community has put its faith in his acumen and foresight twice, with the Zara bond issue nine years ago and the Pavi bond issue in 2007.
In the “very long term”, he conceded, PG Holdings could aspire to go to the market.
Zara, strategically located on Sliema’s The Strand, is currently celebrating its ninth year in business. Pavi Supermarket, the joint venture he established in Qormi with his brother-in-law Victor Grech, is already five years old. Cash generators by their very nature, the two are at the heart of the wider Paul Gauci business.
“The way things are, I don’t need cash,” the PG Holdings chairman was keen to stress. “Right now, I am looking at ways to preserve this business’s position. I have realised many of my business ambitions – I have entered all the sectors I had my eye on when I was younger.”
Financial services, he pointed out, was one sector he had longed to tap. That ambition was fulfilled when he joined a group of investors to open Banif Bank Malta plc in 2008.
His business interests now span key sectors: hospitality (through the five-star Westin Dragonara Resort), property development (through Pablo Properties), banking, fashion and food retail, and maritime services (through Polaris Marine, the Valletta-based marine support and supplier company).
He explains the group’s set-up is such that risk is spread, the business enjoys security, and there is a constant, healthy cash flow.
He recalls how as a young lad he would go to watch movies at the various cinemas around the country. Even at that age, his entrepreneurial spirit would spur him to look around the sprawling properties, dreaming of what business potential they could fulfil.
Over the years, he has acquired many of them, most notably the Alhambra cinema on the site of which the multi-storey Zara store stands today.
Mr Gauci says two factors have always swayed his business decisions – location and brands. Most of his holdings or interests are housed at some of the most desirable high street or industrial addresses, a factor which contributes to ventures tiding over in a slowdown.
The other is to always work with established brands. He has done that with Auchan (the French-based multinational food corporation), Westin under the Starwood umbrella, Banif, and Zara, the Spanish Inditex Group’s most successful brand.
He describes his great admiration for Amancio Ortega, who started the Inditex empire in the 1960s in a garage in La Coruna, and the fast-to-market Zara business model. Still largely involved in the business and often seen in shirtsleeves on the shop floor examining business processes, it was Mr Ortega who signed the Malta franchise agreement with Mr Gauci.
He has so far resisted the temptation to open a second Zara store, mindful of the local market’s size and limitations. A second store risked being counter-productive, not necessarily conducive to the franchise’s growth in Malta, he explains.
That was the pity with Maltese entrepreneurs, he added. With their acumen, perseverance and wealth, many local business people would go on to achieve greater things if only they had a larger market in which to operate.
He could, he admitted, emulate many others who had gone abroad seeking growth, an idea he has toyed with occasionally. He does have some investments in property in Romania, where a manufacturing concern he once ran with 400 employees has now been leased to an international furnishings maker.
He attributes much the success of each of his ventures to having Maltese general manager leading teams.
“Maltese managers are on your same page,” Mr Gauci explained. “They understand the brief you give them to the letter because they have local knowledge. They understand the market we operate in, the business culture, the real demands of Maltese customers. They are in tune with the business objectives. Non-national managers do not always possess these skills and can sometimes be a restraining force.”
Now overseeing his business interests from a poolside wood-panelled office in the grounds of the Magħtab home he shares with his wife and 20-year-old daughter, Mr Gauci has allowed himself to indulge more frequently in his hobby in his spare time – helicopter flying.
He says he is past setting his mind to studying for a licence and has teamed up with a retired professional pilot to take to the skies.