Louis Vuitton, Dior, Louboutin… One luxury boutique follows another in the Mall of the Emirates in Dubai. After a month of war in the region, crowds of idle salespeople are looking for customers or scrolling boredly on their cell phones.
A rare customer who has just left Chanel and wants to remain anonymous is sure: you shouldn’t come to Dubai at the moment. “It’s dangerous, it’s war. It’s different for me, I’m from here. If I die, I’ll die with my family,” she explains. She is wearing a black dress and a niqab and has an orange bag from the Hermès boutique opposite on her arm.
The salespeople in impeccable suits have instructions not to speak, they say. However, one of them briefly describes the general mood. “Of course there are fewer customers, but you notice that especially among the tourists. The locals continue to come. Luckily we have a large local customer base, nobody panics.”
Dubai has patiently built an image as an oasis of peace for wealthy expats and a temple to luxury shopping. This image took a hit when Iranian missiles and drones hit iconic locations early in the conflict. The conflict was triggered by the Israeli-American offensive against Iran.
The tourists have fled and the luxury industry is practicing positive thinking. “The prevailing feeling, after the initial dismay, is that the situation is temporary and will quickly return to normal,” explains an industry insider who wishes to remain anonymous.
‘Fashion Avenue’
The market share of the Middle East, one of the few growth regions, is not insignificant. According to analysts at Bernstein, it is between six and eight percent of the brands’ global sales.
They estimate that luxury sales in the region are expected to halve in March. This is mainly due to the collapse in tourism, both locally and in transit. The major hubs such as Dubai, Doha and Abu Dhabi airports are currently closed or operating at a slower pace.
More than half of the region’s luxury boutiques are located in Saudi Arabia and the Emirates. The most profitable among them, those who generate the highest sales, are gathered in the Dubai Mall, another impressive shopping center in the city.
With its waterfalls, massive aquarium, 1,200 shops and more than 110 million visitors a year, this swanky behemoth boasts of being the most visited place in the world.
On this Saturday evening at the end of March, there are no groups of tourists on guided tours, but the regular customers are there. However, customers are more likely to flock to Primark, a newly opened budget brand, than to the spectacular and glittering ‘Fashion Avenue’ with its huge luxury boutiques.
Like Covid
In order not to “cause unnecessary concern” or damage the “reputation” of the Emirates, property developer Emaar has banned brands from closing or shortening opening hours. In the luxury segment, those who demanded this were threatened with termination of their rental agreement, according to the industry insider interviewed by AFP.
According to Bernstein analysts, their visitor numbers have “collapsed”. Several brands have converted their salespeople to online acquisition.
The strategy proved particularly effective, they say. The region is full of wealthy customers who “have nothing else to do but shop”, similar to “during Covid”.
The industry is hoping for a quick end to the conflict and is relying on the phenomenon of ‘revenge spending’ – catch-up consumption by “relieved” customers. “The key, however, is the return of tourists,” analyzes the industry expert.
The worst scenario, in his opinion, would be a protracted conflict with sporadic attacks on the Gulf. This would have a lasting impact on Dubai’s attractiveness.
In the Mall of the Emirates, between two luxury brands, the famous and impressive artificial ski slope is also deserted.
The employees, who are burying their noses in parkas to endure the temperatures below zero degrees Celsius, are also standing there with their legs in their stomachs while the chairlift runs almost empty. They are waiting for the tourists to return.
This article was created using digital tools translated.
FashionUnited uses artificial intelligence to speed up the translation of articles and improve the end result. They help us to make FashionUnited’s international reporting quickly and comprehensively accessible to a German-speaking readership. Articles translated using AI-based tools are proofread and carefully edited by our editors before they are published. If you have any questions or comments, please email [email protected]
