With the war in Iraq, unstable politics in Iran and the ongoing unrest in the occupied territories bordering Israel, luxury retailing may not be the first thing that comes to mind when thinking of the Middle East. However, for the six Persian Gulf states that comprise the Gulf Cooperation Council — Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Oman and Qatar — huge oil riches, relative sociopolitical stability and recent drives to modernize and diversify their economies have led to growing pools of wealthy consumers and a booming demand for status brands.
"The Middle East is a region not immediately identified with all things beautiful. It is really many things to many people, from a landscape of political conflict to a place of unimaginable wealth. I guess both are realities," said Shireen El Khatib, chief executive officer of Dubai-based Al Tayer Insignia, the region's fastest-growing player in the luxury business. Al Tayer's portfolio of 30 brands and 59 stores includes Giorgio Armani, Bulgari, Coach, Dolce & Gabbana, Gucci and Yves Saint Laurent.
"Thirty years ago, the land I call home was a place of exotic landscapes and veiled mystery. The hottest thing on our mind then was not the Gucci Indy bag with the limited edition gray mink and crocodile trim, but the stifling weather that reached up to 50 degrees Celsius, or 120 degrees Fahrenheit," she said. "Three decades on, the weather is just as stifling, but these days we are as well versed with the YSL Downtown bag, Botox injections and Ferraris as any stylish woman sipping a Bellini in downtown Manhattan."
What was the crucial turning point that helped spur the luxury boom in the GCC? While buoyant oil prices, a growing population, an ideal geographic location and the emergence of nouveau riche Russian tourists (who make up 60 percent of all Al Tayer Insignia sales to tourists) were all important contributing factors, El Khatib points to perhaps an unlikely catalyst: the 1990 Gulf War.