Encouraged by a gusher of oil wealth and rising tourism, Europe's luxury players are stepping on the gas in the Middle East, opening scores of boutiques in what they describe as one of the world's most dynamic emerging markets.
"It's as fast as China," said Michael Burke, chief executive officer of Fendi, which is posting growth rates of between 30 to 50 percent in the region. "I'm very bullish on it — much more bullish than India."
"The appetite for luxury has been booming, as we boomed in Russia," agreed Sidney Toledano, president of Christian Dior, which plans to almost triple its store presence over the next 18 months, including a Jeddah, Saudi Arabia, boutique and a second Dubai location. "We see a very good potential for Dior. [Customers] are brand-conscious and looking for expensive items."
Sheikh Majed Al-Sabah, president of Kuwait-based Villa Moda Lifestyle and one of the most active fashion figures in the region, said he plans to open more than 40 boutiques this year, including the first Middle East flagships for brands as diverse as Dries Van Noten, Tom Ford, Vivienne Westwood, Issey Miyake and Martin Margiela.
"When you see that oil is reaching $100 a barrel, it is obvious that people, governments, companies and everyone is getting richer. The business is amazing," Al-Sabah said. "You are talking about an entire region that is still 'underdeveloped.' The potential is high since there are many major cities in the Middle East that still do not have any decent retail stores."
Having seen their business in the region skyrocket 300 percent over the past year, Dutch duo Viktor Horsting and Rolf Snoeren said they expect it to account for one-fifth of their turnover in the near future. Coming this year, in partnership with Villa Moda, are freestanding stores in Kuwait, Bahrain, Qatar and Dubai.
"We're impressed by the dynamism of the region and the appreciation of beauty and design," the designers said. "It feels like this is the place in the world where big things are happening at the moment — only in close competition with China. We see a big potential for the business."