Tos Chirathivat, Central Group: a balancing act in Bangkok

Four years ago, Tos Chirathivat was scrambling to rebuild his company's flagship CentralWorld Bangkok mall after it was torched during the last showdown in Thailand's political crisis. Now the Central Group chief executive is drinking coffee in Harrods in his newest shopping centre and lauding the calm since the military ended the Thai capital's latest street confrontation via the May 22 coup and crackdown on dissent.

"You feel better, business is better, everything's better," Mr Tos says during an interview in Harrods' tea room - one of scores of luxury brands hosted by Central's Embassy mall in the Thai capital. "We had no peace; lots of fighting and lots of argument; every party was blaming each other. And now it's peaceful."

Central's rollercoaster fortunes are a microcosm of how big Thai businesses, many of them still owned by impeccably-connected families, are navigating the political permacrisis in Bangkok that has pitted largely urban pro-establishment "yellow shirts" against "red shirts" drawn in good part from the country's rural north.

Like other companies, such as CP, the retail-to-insurance conglomerate, and Thai Beverage, the drinks company, Central has hedged its bets by tapping rising wealth in the provinces, investing internationally - and, at least in public, attempting to keep Thailand's power struggle at arm's length.

"We are . . . not political because in our business we deal directly with consumers," Mr Tos says, rejecting the idea that the company is either pro-coup or pro-yellow, or perceived as being so. "Our group is service industry. We have no business with the government at all."

His response is born of Central's long experience of the diplomatic balancing act needed in a traditional Thai business world, the bulk of which is aligned with the monarchy, the military and the latest putsch.

Tiang Chirathivat, Mr Tos's grandfather and a member of Thailand's commercially powerful Thai-Chinese community, first founded a family company in 1927, opening Central's first department store in Bangkok in 1956. Since then, Central has expanded into a conglomerate, its shifting investment portfolio over the years including hotels and the Thai arm of Japan's Ootoya restaurant chain.

Full details of Central's financial performance and ownership remain private, as the group has remained firmly under the control of a family that Forbes magazine ranked top in its Thai rich list published in June, with wealth estimated at $12.7bn. Mr Tos, 49, recalls growing up in the close-knit environment of the 12-house Chirathivat compound in Bangkok, not far from the Australian embassy. He and the other 30 or so children there would eat their meals at two big tables and work in Central's stores during the school holidays, doing jobs including selling toys or sorting labels for imported Lee and Wrangler jeans.

Mr Tos is a 25-year veteran of the company, which he joined in 1989 after university in the US and a short stint with Citibank. After 12 years heading Central's retail arm - building a division of about 500 stores, 22,000 employees and well over $3bn in sales - he was appointed chief executive of the parent company in February.

Mr Tos is thus a leading architect of the strategy that saw the Central Embassy mall burst on to the scene at the height of Thailand's troubles, its May 8 opening a whirl of evening gowns and stirring orchestral music.

While some sceptics saw fin de siecle symbolism in the unveiling of an elite retail playground just as a struggle rooted partly in class conflict was burning bright, Mr Tos says the opening's timing was accidental and would have happened years ago but for the reluctance of big international brands to come to Bangkok in the face of prolonged political unrest.

"This project . . . has been delayed for five years because of the protests," says the dapper Mr Tos, adding that the land was bought from the neighbouring British Embassy as long ago as 2006, the year a military putsch against Thaksin Shinawatra's elected government kick-started eight years of turbulence. "If you want Chanel, you want Louis Vuitton, you have to wait for them."

Mr Tos says he is encouraged by the mall's performance, despite the depressive effect of both the weeks-long post-coup curfew and tourism numbers already weighed down by the street protests before the putsch. His positive take reflects a wider - some critics say ill-founded - wave of post-coup optimism rolling through Thailand's retail sector, other industries and the foreign banks who analyse them.

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"It's much better in terms of the sentiment and, in terms of traffic, the numbers have come back quite a lot," says Chai Srivikorn, president of the trade association at Bangkok's mall-heavy Ratchaprasong Square, just down the road from Embassy.

Yet, for all the cautious positivity, Central and other companies have been busy diversifying in the face of the capital's political troubles. Central has been selling products such as watches and jewellery in growing numbers in historically neglected northern Thailand, where government money has flowed in the past decade thanks to agricultural subsidies, cheap loans and other schemes delivered by "red-shirt" officials led by or allied to Mr Thaksin.

"On this side, I have to give the credit to the past governments in the last 10 years," Mr Tos says. "They have done a lot to help boost the provincial economies."

Central is also expanding in Asia, especially in populous fast-growing southeast Asian countries such as Vietnam. Mr Tos say it has shifted attention from China, where it has suffered along with others from a saturated retail market, lack of management expertise and logistical difficulties created by the country's vast distances.

Central has opened another front in Europe, with Mr Tos aiming to double sales there in five years. He aims to use Central assets such as Italy's upscale La Rinascente malls to attract wealthy emerging-market shoppers, who can buy products there more cheaply than at home. "We're in Europe not because of the Europeans," he says. "We're in Europe because Europe is the centre for the rest of the world."

For all Central's international ambition, the opening of Embassy is a sign that its home market - and the capital - will remain a main focus. Years after the burning of CentralWorld - which Mr Tos insists was not political - a question still gnaws at him and many other business people: will Thailand's latest bout of military rule deliver more than a short-term pause in the long-running battle for the nation's soul?

"The last month has been good and the next two months should bevery good," Mr Tos says. "But then, after that, we need to see what will happen."

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