Islam Mahdy: The Mogul

Have you been to Dream Park?

No, I always felt that it’s competition even after we sold it. I heard it’s good but I’ve never been.

One of the rides is that you get to buy Amr Diab cassettes; we always loved that ride...

I’ve still got a soft spot for amusement parks. Anywhere we go to, no matter what city, we always go to an amusement park.

Did you know that Dubai is building a Quran themed amusement park?

I can’t remember where I heard about it, but somewhere in the States there’s a Bible-based amusement park, so it’s not that far-fetched.

What’s the best one you’ve ever been to?

Tivoli in Copenhagen, it’s insane. There’s another one I can’t remember, I was a kid back then, it was a walkthrough a haunted house like the London Dungeons, but this one was insane.

You have kids now; do you feel bad that they don’t own their own amusement park?

I actually think about it sometimes when I have to take them and pay 50 pounds for a stupid ride...

Did you know growing up that you would take over the family business or did you have a choice?

Growing up I always felt that I was going to be part of that. Every summer we would work at the hotels as waiters. We used to do that every summer, so I knew that eventually I would be working in with the family. But when I grew up and graduated and started working in the family business, I resigned like a month later, and started working in investment banking because when you go into a family business, you don’t know if you’re entitled to it, you feel like you need to prove yourself somewhere else and come back to it.

How do you deal with that enormous pressure of living up to your father’s legacy?

It’s a constant conflict. I think my number one motivator, the thing that I constantly worry about, is that my father would leave a gap. In the business, most of them have been there 20 or 25 years and he was a character; he was very charismatic, very present so it’s something I always think about, and something I don’t think I’ll ever do. He started out as a waiter in the Sheraton Heliopolis.

And he built the empire by himself?

Yeah. A waiter in Sheraton Heliopolis in ‘82 and my mother was a housekeeper there. Until now, Moustafa Khalil, who just left Fairmont Heliopolis, tells me that to this day the lockers still have my father’s picture, everyone talks about him, and everyone loves him. When they found out that Moustafa is my friend, they took care of him. It’s very hard to live up to his legacy.

What would you say the biggest lesson is that you’ve learnt from your father in terms of business?

Two main ones; firstly, humility but it sounds too romantic. The thing I remember the most is he didn’t really care about failure. Even me, I was doing monthly Hip-Hop events when I was 16 or 15. I would be nervous before it. It was comforting to hear from him “So what if it fails? At least you learned something from it.” He had a very good attitude towards failure, he actually failed twice in that he built an empire and then it went broke and then built it again and went broke again. 

So you went into investment banking, what brought you back?

I went to GMS to do investment banking and then my father passed away, so I had to go back. It was not a choice and it was a very tough time. In 2003 there was sort of a holocaust against businessmen and many went to prison. Our business was under supervision of the prosecutor general. My father passed away during the time that we were still in difficulties. He passed away in 2005, a few months after we settled. It was a very difficult time, and we had to pay off the instalments.

So you went into it unprepared because you’d been away from the family business for so long...

I was lucky that I worked in banking and the issues were financial, so it was good that I had that experience.

Sequoia, Left Bank and now, Mirai, were your concepts but you took over this company which has a huge portfolio of products and brands. How did you make the decision to diversify into something that’s very unique compared to what the portfolio was?

2004 was the year I graduated, and two months after I returned, was the opening of Sequoia which was my concept, but my father was still alive at that time. What we did was take the entire portfolio which was real estate, hotels, entertainment, and restaurants and looked at what were the core, sustainable businesses and that’s what we invested in. We shut down what we thought had no future and cut our losses which included Merryland and a place in Maadi which is now called Platform, the amusement park sector, three other hotels that we managed

So with all these diverse investments, what did you find was the most profitable?

Definitely restaurants. I would think restaurants are a sustainable business because of the competition we’re seeing. A lot of people are jumping towards that, like I said at the beginning with the amusement parks, you can see it happening in the restaurant industry. But real estate has been the most resilient.

The property on the Nile with Sequoia and Left Bank, was that already on the portfolio?

Yes.

So you just change the concept that was on it?

Yes

Speaking of competition, why do you think that Sequoia has been one of the few concepts that have managed to have sustainable success since its start?

Actually, before Sequoia, when I was in college, I opened a club called DeKarma in 2001. DeKarma was honestly the best thing that happened in nightlife, but it only stayed for three months. That was it! Every Monday I would fly to London and buy records and every Wednesday I would fly in a DJ from London. We had strong support from Ministry of Sound. The reason it failed after three months is because someone was murdered in a place called Pomador and there was secret police at the door of every club, so it became very rough to sustain it because no one wanted to go to clubs anymore. Four clubs closed; us, Pomador, Upstairs, and a place called Bamboo. We all closed in the same month. From that, I learned that it’s better not to start big and to think about the sustainability rather than the hype.

What was the music like back then?

It was House, Garage and Hip Hop in room one and Trance in room two.

How old were you when you started the club?

18.

So did you pick up a lot of women because you owned a club?

I was dating at the time; I should’ve had a better plan haha! I was committed back then and we’re actually married now, so it worked out in the end!

Would you ever go into nightlife again in terms of clubbing?

I don’t think so because it was what I liked back then but not now. It has to be something I would go and do, and with kids now I don’t go out, so I don’t think I would be that successful.

So why has Sequoia maintained its success?

There was never a big hype around Sequoia, it was always sustainable growth. We never grew so big as to open three, four or five branches. We concentrated on the quality and always improved. We don’t have to be great in the beginning, and we weren’t great in the beginning; the food wasn’t that good but as long as we’re constantly improving that and as long as we’re better than the time before, that’s the important thing. That’s why we never did events, never did anything big, and never did a lot of marketing. We’ve always wanted something sustainable. I think La Bodega is the same; La Bodega was never the biggest thing in town, but it was always a great place.

Allahyerhamo! How do you rate the quality of Egyptian food overall?

It’s terrible. I think it’s the worst in the Middle East but there’s a lot of explanation for that. The F&B industry in Egypt is starting to be more competitive so I think people are going to start investing in better chefs but you’re always competing with hotels because they have the scale to bring in a great chef, the chefs get paid better than general managers! But eventually I believe we are going to start getting great chefs. The market dictates. At first, the people didn’t really care; they weren’t paying for quality of food, now they are.

Do you believe that’s down to people’s individual tastes changing or is it more the industry changing?

People’s taste is changing, they’re becoming more critical. People are exposed, they’re travelling abroad, they know what they’re paying for, and they know what they’re expecting so it’s forcing everyone to increase their quality

So where do you find your chefs?

We have head-hunters, five or six big ones that work internationally. We did that with Left Bank, we got a French chef. He was a talented chef with a great background, but I learned that if you’re not a hotel, it’s hard to fit a non-Egyptian chef in a place where he’s managing Egyptians. It’s very hard to manage Egyptians for some reason.

What’s the weirdest incident you remember happening in Sequoia?

It was actually two days ago; some guy was beating a girl and trying to take her into his car, apparently she was his fiancée. She ran into the bathroom, it was fucked up.

We were at the taster for Mirai, next to Sequoia. What happened to Mori Sushi? Did you do a number on them?

No haha, Mohammed Fahmy (Mori Sushi co-owner) is actually a good friend, we have a very good relationship, we exchange ideas. He’s one of the few people I actually respect in the industry, but we talked about it about a year ago and now we’re going to open our own Asian concept Mirai.

So tell us about the concept, how does it differ from other sushi places?

The thing that always differentiates us is the experience itself. We might not have the best food but you’ll always have a great experience, so it’s built on that experience. The food, the service, the design of the place is all very intimate. We’ve been able to get a great team of chefs whether it is for the sushi, the teppanyaki, or the Thai, so I think it will be great.

Did you choose those Buddha decorations yourself?

No, they're inspired by a famous artist. They thought it would be great to have something that relates to him, so those statues are similar to ones that he did, but they had to be different so it wasn’t a copy, and they changed the clothes. 

Is it worth spending the money on the Buddha? Is it a good business decision?

Probably not, that’s why there’s a constant fight with my management team haha! It doesn’t make any business sense, but it looks cool.

When you walk into Sequoia past Left Bank, do you feel like you’re being judged by the people in Left Bank?

Yeah, and it’s a great spot for that. All that’s missing is to give numbers to people in Left Bank to score the people that are walking past haha!

That would be great viral video

Yeah, we should do that!

Why is Left Bank so cold?

Because at first we had a constant in problem in that it was too hot, so we keep it as cold as possible until someone complains. We need to find a balance.

Left Bank had a lot of issues with the F &B at the beginning, which surprisingly didn’t affect people from coming because people just really liked the set-up. Tell us about the learning process from that...

It took us a while to realise that the food actually was bad but the chef was really good. The management went wrong. He started out great, then eventually the quality went bad because as an executive chef, he’s not doing everything with his own hands. It was tough to decide that, although he’s great, he’s not great for the place. So we terminated the contract and brought consultants on board and brought a local executive chef on board. The lesson is that Egyptians can fuck up anyone no matter how good they are haha! If you don’t know how to manage them, you’ll get screwed in the end.

Did you expect that Left Bank would attract so many hipsters?

Funnily enough, that was the target market!                                              

Don’t ever tell them that because it’ll become uncool...

I was talking to my friend artist Hani Mahfouz, and I was telling him about the concept about how we wanted to attract artsy, Downtown people. He told me that hipsters don’t pay for anything. You charge them five pounds for a coffee, and hayetla3 yefshakhak. I told him that I didn’t mean the artsy people, I meant hipsters, so we based the concept around New York in the 40s and 50s

So the hipsters with daddy’s money?

Excatly. The struggling artists... not so much.

But you attract a very diverse audience.

Yeah, but the core audience, the people I’m very happy to see there, are the hipsters. They don’t spend much, but they look good!

If hipsters are the keyword for Left Bank, what’s the keyword for Mirai?

With Mirai, we were more targeting business lunches and business dinners, foreign communities and diplomats.

So actual rich people...

Yeah, to make money haha.

At Mirai, you're serving imported wine?

Yeah, because a lot of people were commenting about that wanted imported wine instead of local wine. However, we’re only allowed to serve what we get from the duty free.

Why Asian?

Every time we’re launching something, it’s because we can’t find it. When I launched Left Bank, it was because I was in the mood for coffee, when I launched DeKarma it was because I was in the mood for clubbing.

What if you’re in the mood for Chipsy? Are you going to open a koshk?

Maybe.

How will you attract hipsters to this Koshk?

You can attract hipsters to a koshk without much effort, it’s authentic.

If you’re really hungry, which of your restaurants do you go to eat at?

Sequoia.

What’s your go to dish?

As you can tell, I’m not a health-oriented person, so I go all out with the mezzes!

Do you pay when you go to Sequoia?

No, there’s internal accounting.

Do you have any friends from the Sinbad days that take advantage of all your restaurants?

I should be more critical, I need to start filtering them out haha! Sadly, no because we moved around a lot.

How old are your kids?

4, 2 and sixth months.

Are you going to do the same thing with them and not let them know what you own until they’re older?

Yeah, I think my parents did a great job in making me realise that this might not have existed, so I need to know how to survive. My sister and I didn’t go straight into the family business, she worked at Pepsi and I went into investment banking. I wouldn’t want them to work in the family business straight away.

Would you do what Warren Buffet did and donate all your money to strangers and leave your kids with nothing?

No, I’m not that ethical! Not to that extent, but we have a foundation and part of the money goes to charity automatically. Hopefully, over time, that will get bigger.

How are the hotels doing?

It’s not the best time to be in the hotel business, but it’s fine. We just won “Best 4* Hotel in the Red Sea” from the Ministry of Tourism. We got another award from Holiday Check which is something like “Best Rating of a Hotel in Hurghada.” We’re concentrating on building the infrastructure because we have zero-occupancy so we can do all the maintenance we want.

How do you attract tourists when so much of what’s happening in Egypt is out of your hands?

Sadly, it ends up being “this is the cheapest destination we have” so you get the cheapest tourists, and very low margins.

Is there any one nationality that you see more than any other during this time?

British, surprisingly. They’re the most resilient and we don’t know why. Their numbers fell, but much less than any other.

How do you keep track of it all? It’s a very diverse portfolio of businesses...

My father was a great guy and he was able to build a great team around him, so we were lucky that the management team is so great.

What’s the biggest mistake you’ve ever made in hiring someone?

Left Bank. Funnily enough, the ex-chef emailed me about 3 months ago apologising. I think he realised that things were bad

Did you reply?

...no.

Are there any ventures or ideas that you started and that completely flopped?

Yeah, when I was in Boston at university, I was chair of campus activities. Somehow, someone approached me knowing that I did events and had links with Ministry of Sound, and he said let’s start an events management company. He turned out to be Snoop Dogg’s manager. We started a company called Elevator Holdings to mainly handle Hip-Hop PR and it completely flopped. We organised an East Coast launch for Drop it Like it’s Hot in 2002, and literally 20 people came.

Speaking of Jay-Z, did you watch Jay-Z and Beyonce’s performance at the Grammys?

No, but I saw him live last week in Boston. It was him and Timberland, it was insane! After the concert, he spent an hour talking to people in the audience like “I see you wearing the tour t-shirt, appreciate it!” He’s talking to people, and the concert is humongous, it made it more intimate.

What advice would you give to someone starting an empire like yours or Jay-Z’s?

I didn’t build an empire haha.

Well, a small business then. If they’re looking to expand, what is the one thing that they need to know?

Who you have on board is the most important thing, that’s what I’ve seen over and over again. You can have a great business with a crappy team, and it fails or an average concept with a great team, and make it work.