Luxury brands sold in the Mall of the Emirates – one of the largest shopping malls in Dubai – saw sales decline by 30-50 percent in March. compared to the same month last year, Reuters reports, based on reports from a source familiar with the matter. The war between the United States and Israel against Iran has shaken up one of the most important markets in the industry, which is valued at approximately $400 billion.
See also: The war with Iran is strangling the Persian Gulf economy. A permanent breakdown is on the horizon
Dubai is no longer an oasis of stability
Traffic in the Mall of the Emirates, which includes, among others: boutiques of the Louis Vuitton, Dior (LVMH), Gucci (Kering), Richemont, Cartier, Chanel and Rolex brands, but also an indoor ski resort and a wellness clinic, fell by approximately 15%. in March. In turn, traffic in Dubai Mall dropped by almost 50%. and further declines are likely.
Shopping malls in Abu Dhabi were slightly more resistant to geopolitical events, but sales still dropped by approximately 10%. – says a Reuters source. Luxury brands did not respond to the agency's request for comment.
See also: The biggest crisis in decades. The war exposed the weaknesses of the UAE economy
Thanks to low rents and labor costs, higher retail prices than in other regions and virtually no taxes, Dubai is one of the most profitable sales destinations for luxury brands. For such fashion giants as Louis Vuitton, Hermes and Chanel, annual sales per square meter in Dubai may exceed several hundred thousand euros, many times exceeding the world average – a source familiar with sales results at the Mall of the Emirates told Reuters.
— The Middle East, responsible for approximately 5 percent. global consumption of luxury goods, has been one of the industry's rare bright spots, recording double-digit annual revenue growth in recent years, Carole Madjo, head of luxury research at Barclays, told Reuters. “It was definitely a strategic region,” she added. However, Dubai's carefully crafted image as an oasis of security and stability has virtually ceased to exist.
