Despite recent economic distress, Dubai is still perceived as the most luxurious market in the Mideast and strengthened by a recovering retail market on the heels of a sharp drop in 2009, according to retailers.
Industry figures estimate that Dubai’s retailers experienced a 45 per cent decline in sales over 2009. The emirate is famous for magnificent hotels and upscale malls featuring the leading brands worldwide.
Those retailers agreed that the retail market hit a crossroads during the first quarter of this year, turning down the road to recovery.
Big name retailers predict significant gains. The Rivoli Group, partially owned by Swatch Group, expects 2010 to be much better than 2009, according to managing partner Ramesh Prabhakar.
Prabhakar predicted that the area will see a rush of luxury brands and upscale retailers entering the market, still drawn to the UAE.
He projected that 2010 sales would rise by 15 to 20 per cent over last year.
Rivoli is on the list of expansive luxury brand retailers, with about 300 stores spread throughout the lower Gulf region. Big name brands like Tag Heuer, Boss, Omega and Tissot are sold in their stores.
The retail industry in Dubai is responsible for one third of the gross domestic product (GDP) and took a beating during the economic crisis as consumer spending tightened and tourism dropped.
Consults at CB Richard Ellis conducted a 2009 survey on the worldwide retail market, ranking Dubai in second place behind London and ahead of Paris and New York. Dubai attracted 55 per cent of retailers and was very close to the 56 per cent attracted by London.
As the chief executive at Al Fahim Holdings, Mohammed al-Fahim noted that even with the wide expansion of malls and retail in Saudi Arabia and Qatar, he could not envision Dubai falling from the top spot as the Mideast center of luxury.
Real estate consulting firm Colliers reported that the total amount of shopping mall space in Doha, the capital of Qatar, was expected to double over the period between January 2009 and December 2010.
Dubai’s goal was to be in the elite, an example to the world and a treasure in the Mideast, according to Lorens Ziller. Ziller is a partner in Elisabetta Gucci Hotels and Resorts, a group with plans to expand to the emirate by opening a luxury boutique hotel there. Ziller also noted at the Reuters Global Summit held in Dubai that no area in the region compares to Dubai today.
Some European retailers depend on Dubai. Cerruti – a fashion house based in Italy – counts on 5 to 10 per cent of their total sales coming from Dubai.
Mideast traditions make it more difficult for places like Abu Dhabi and Qatar to develop a similar culture to Dubai where tourism thrives, according to Florent Perrichon, chief executive of Cerruti, who spoke in Milan at the Reuters Summit.
Other global retail brands such as Italian-based Valentino are looking to grow throughout the Middle East.
Stefano Sassi, chief executive at Valentino, noted that their brand was seeing the Mideast turn into a major region for development in 2010. He also spoke at the Reuters Summit in Milan noting that the Mideast is their second target market behind China.
Valentino has shops in Dubai and Riyadh and about 7 or 8 shops in total throughout the region.
Dubai is not just the luxury capital of the Mideast region but also of Central Asia, according to the chief executive of Damas, a jeweler based in the UAE. Anan Fakhreddin noted the strong consumer demand coming from Asian countries such as India and Russia.
Fakhreddin said that there is a vast base of mature luxury brands with a sole presence in Dubai. Nearly any company who sees the value of a boutique or shop in the Mideast will have one in Dubai.
He also noted that it is commonplace for large Saudi families to fly into Dubai to shop for luxury wedding items.Paul Holdsworth, Staff Writer, Gulf Jobs Market News