Women’s Wear Daily
04.24.2014
designer-luxury
designer-luxury

Luxury's Latest Frontier: Brands Rush to Expand In Surging Middle East

Building fashion fortunes on sand? You bet.

By
with contributions from Alessandra Ilari
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Executives cited a range of factors underscoring their confidence in the region, from a historical appreciation of European luxury goods — right up to haute couture — to a surging swath of wealth beyond the ruling royal families. The region's growing petro-wealth is driving its companies to increasingly invest abroad — including the Dubai-based Istithmar's purchase of Barneys New York — further broadening their contacts with the West.

There's also such a rush of tourists to cities like Dubai that brands such as Fendi must stock fur coats to sell to vacationing Russians. (Rich locals, who need furs for Megève, France, or Gstaad, Switzerland, prefer to buy theirs in Paris or London.) Shireen El Khatib, ceo of the Dubai-based Al Tayer said at the WWD/DNR CEO Summit in October that Russians were the largest group of overseas visitors to the desert nation, accounting for 60 percent of its tourism. They fly into Dubai, stay a week and shop, she said.

Burke noted that Qatar Airways and Emirates are aggressively positioning Qatar and Dubai as new international hubs, which is bound to drive even more tourists and investment to the region.

"The Middle East is exploding," said Massimo Gasparini, ceo of Missoni, which expects the region to account for up to 7 percent of its sales in five years, up from the current 1.5 percent. "We believe the region has a huge potential. I'm just back from a trip to Dubai where I took a photograph in which you can see at least 50 construction sites. The pace at which this strip is growing is unbelievable."

"The market potential is huge and growing," agreed Christophe Caillaud, president of Jean Paul Gaultier, which boasts 11 doors in the region and will add boutiques in Jeddah and Qatar in 2008. "Dubai is becoming a hot tourist destination and all business of the Middle East passes through Dubai. Rich countries like Qatar and Bahrain are opening to Westerners and to high luxury fashion brands, and more people are becoming big spenders."

Indeed, Dubai has become so expansive and choked with traffic that brands need to open several outlets to capture all the possible clientele — just as they do in shopping capitals such as Paris, Hong Kong or New York. In a sense, the city is much like Las Vegas: Tourists prefer to shop in or near their hotels, and rarely travel to distant stores.
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