The Tamesis
As conflict destabilizes parts of the Middle East, ripple effects have rippled through the region’s luxury economy, which has emerged as a promising growth engine for a troubled global industry.
Attacks in the region since the United States and Israel launched attacks on Iran have resulted in casualties, airspace closures, flight cancellations and warnings for travelers to leave the area. While most luxury goods companies refuse to comment on the matter at all or even know whether their stores are open or closed, The Dubai Mall, a key location for luxury consumption in the Middle East and home to most of the biggest brands (from Alaïa to Gucci and Zegna), remains open.
In Dubai, a city where shopping is a core social activity, leaders have tried to reassure residents and visitors that they can live safely as usual; Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum even made an appearance at a mall last week. In other countries, such as Bahrain, more stores closed after the first attack. Bahrain City Center, the country’s largest luxury mall, was temporarily closed last week, but shops have since reopened.
Chalhoub Group, the Middle East’s leading luxury retailer that operates more than 950 stores of top brands, said only that its risk and crisis management committee remained “fully activated” as it monitored developments. The company said its top priority “is the safety and well-being of our employees while responsibly maintaining business continuity and aligning with local authorities as the situation evolves”.
Achim Berg, founder of FashionSights, an independent business think tank, said that before the war broke out, the Middle East was “one of the few luxury growth areas in the world”. But as can be expected, the current environment doesn’t exactly incentivize people to shop. “Any disruption we see is not good for luxury companies.”
