In Dubai – Louis Vuitton, Dior, Louboutin… At the Mall of the Emirates in Dubai, luxury boutiques line up one after the other: after a month of war in the region, their armies of idle salespeople wait for customers or scroll through their phones in boredom.
Just out of Chanel, a rare customer who prefers to remain anonymous is clear: “don’t come at this time” to Dubai. “It’s dangerous, it’s war. It’s not the same for me, I’m from here, if I die, I die with my family,” she explains, dressed in black robe and niqab, carrying an orange bag from the Hermes store across the street.
The impeccably dressed salesmen have instructions not to talk, they say, but one of them briefly describes the general atmosphere. “Of course, there are fewer customers, but it is mainly felt at the level of tourists, locals continue to come. And fortunately, we have a large local clientele, no one is panicking.”
The image of a haven for wealthy expatriates and a luxury shopping mecca that Dubai has meticulously built was tarnished when Iranian missiles and drones hit its iconic locations at the beginning of the conflict triggered by the Israeli-American offensive on Iran.
Tourists have fled, and the luxury industry is focusing on positive thinking: “the prevailing sentiment,” once the “stupor” of the first days has passed, “is that the situation is temporary, that it will be resolved quickly,” explains an industry insider speaking anonymously.
“Fashion avenue”
The market share represented by the Middle East, one of the few growing regions, is significant: between 6 and 8% of the global turnover of brands, according to analysts at Bernstein.
They estimate that luxury sales in March should be halved in the region, mainly due to the drop in tourism – locally and in transit, with the major crossroads of Dubai, Doha, and Abu Dhabi airports, closed or operating at a slower pace these days.
More than half of the luxury boutiques in the region are located in Saudi Arabia and the Emirates. And among them, the most profitable ones, those with the highest sales, are concentrated in the Dubai Mall, another imposing shopping center in the city. With its waterfalls, giant aquarium, 1,200 shops, and more than 110 million visitors per year, this bling behemoth boasts of being the most frequented place on the planet.
There are no guided tourist groups visiting on this Saturday evening at the end of March, but the regulars are there. Even though customers are more eager to enter Primark, a low-price store that has just opened, than in the spectacular and glittering “Fashion avenue” housing the huge luxury boutiques.
“Like Covid”
To avoid “causing unnecessary concern” or damaging the reputation of the Emirates, real estate developer Emaar has forbidden brands from closing or reducing opening hours. In the luxury sector, those who demanded it were threatened with their lease being terminated, says an industry insider interviewed by AFP.
Their attendance rates have “collapsed,” according to Bernstein analysts, and several brands have reassigned their salespeople to online prospecting. The strategy has proven to be particularly effective, they say, in a region full of wealthy clients, “with nothing else to do but buy,” like “during Covid.”
Hoping for a quick end to the conflict, the industry is also counting on a phenomenon of “revenge spending” – the revengeful buying spree of relieved customers. But “the key is the return of tourists,” analyzes the industry insider. The worst-case scenario, according to him, is a prolonged conflict with sporadic attacks on the Gulf, which could have a lasting impact on Dubai’s attractiveness.
At the Mall of the Emirates, between two luxury brands, the famous and imposing artificial ski slope is equally deserted. With their noses bundled up in their parkas to withstand the below 0°C temperature, the employees also stand idle, while the carousel almost turns empty. Waiting for the return of tourists.
