🧵 Building a business is one thing. Building one that lasts is another. In Founders Under the Spotlight, we sit down with the founders shaping Egypt's business landscape — and ask them the questions that don’t make it into the press release. EnterpriseAM sat down with Mohamed El Kahhal (LinkedIn), founder and managing director at Kahhal 1871, to discuss how he modernized and grew a family business that has been around for more than 100 years. Edited excerpts from our conversation:

I’m the fifth generation of the Kahhal family, which is originally from Syria. We have run a luxury handmade rug manufacturing and retail business in Egypt for 150 years. Today, that original business is split into two different companies run by two different sides of the family.

I studied finance in the US. When I moved back to Egypt in 2017, our side of the family business wasn’t in a good place. We weren’t innovating, we weren’t modernizing, and as a result, we weren’t selling. Our image needed a rebrand — both aesthetically and strategically. That’s when Kahhal 1871 came into being. I launched the brand using our history to create something new.

For certain product lines, we use the same manufacturing techniques that my great-grandfather used to make rugs. We still do authentic hand dyeing, hand knotting, and hand spinning, which is still a strong selling point for us. The only thing that has changed is the scale.

One of the biggest debates between us and the older generation was whether or not to introduce machine-made rugs. Initially, I was all about scale, and the only way to expand was through machine-made rugs. But the more I looked into it, the more I realized that this would be getting us into a completely new industry, which I didn’t want to do.

The happy medium is called hand-tufting, a new product line that we introduced in 2023. Instead of knotting the carpet by hand — which can take anywhere from 3-6 months and up to two years depending on size and pattern intricacy — the knotting is done on a loom. The rugs are still considered handmade because the process is still manual and requires a lot of skill, but it gives us scalability.

Hand-tufting has allowed us to cater to large hospitality projects. The hand-tufted rugs are also a more affordable alternative to hand-knotted rugs for our retail customers. When we started producing hand-tufted rugs three years ago, we were producing around 800-900 meters a year. Today, that number has grown to 5-6k meters, and we’re trying to scale up even more.

We also expanded our Kilim, flat-weave line. This product was always there, but it was being underutilized because we weren’t working on wholesale. It's our most affordable and highest-volume product today. We currently produce around 10k meters of Kilim annually.

Our B2B business is expanding rapidly. We’ve made new connections within the hospitality industry. Traditionally, our demographic had been newlyweds and people furnishing their homes, but that had started to change as young people weren’t necessarily interested in the traditional rugs that their parents were insisting they buy. Through more modern designs and marketing campaigns that highlight the craft that goes into the rugs, we have been able to attract those younger customers again. We’ve also created a huge network of interior designers and product designers that we had never tapped into before.

Our revenue mix is currently 60-40, B2C vs. B2B. We have three physical showrooms in Heliopolis, U Venues (New Cairo), and Khan El Khalili, and our products are available online on our website. I think hospitality is really booming in Egypt right now. The way I see it, within the next couple of years, we’re going to be looking at a lot more B2B windows.

The devaluations have allowed our pricing to be a lot more competitive on the export front. Our edge over some of our European competitors who manufacture in countries like India, for example, is that we are the manufacturer and the retail brand. This allows us to enter the luxury space while still offering very competitive pricing. We export mainly to the GCC, with Qatar being our biggest client. We’re also an official vendor with TJX and HomeGoods. Our wholesale to the US is all Kilim — and they are ordering very large volumes.

Today, Kahhal 1871 is a rug manufacturer and a retail luxury brand. Part of our success can be attributed to the fact that we collaborate with a community of talented designers and artists while also allowing the community of traditional handmade rug manufacturers to grow. I consider us to be a multi-layered creative hub. We’ve been collaborating with Art d’Egypte, who bring in their artists to design our rugs. The most recent example of that was our collaboration with New York-based artist Alex Proba earlier this year.

The hardest part of running a business is managing energy and time. I personally don’t think you can enjoy both building a brand and managing a business; they are two very different things. I enjoy brand building, and I love creating and storytelling. Trying to balance what I love with the day-to-day demands of running a business is tough, but I grew this thing from the ground up, and I’m wholeheartedly committed.

The most rewarding aspect of running a business is when I don’t have to introduce the brand because people already know it. When someone says, “I saw that campaign” or “I saw this collaboration,” it's nice to just take a deep breath in and think about the things that I was manifesting 10 years ago that I thought would be impossible… and realize that I’ve made them happen.

One piece of advice that has had the most impact on me is that if you keep waiting for the perfect time to do something, it’s not going to happen. I learned this the hard way. I moved back to Egypt, and the first devaluation hit, then it was Covid, and so on. There’s always going to be something that could hold you back — just go for it and hope for the best.