Sales of Europe’s biggest luxury brands have fallen sharply in Dubai and Abu Dhabi, while the conflict with Iran is hitting the fastest-growing market in the $400 billion sector.

According to data from March, luxury houses are seeing a 30 to 50 percent drop in sales at the Mall of the Emirates in Dubai compared to the same month last year.

Visits in this mall fell by 15 percent, while traffic at Dubai’s largest shopping mall, popular with tourists, fell by about 50 percent. In Abu Dhabi, the Galleria shopping center fell slightly, about ten percent, Reuters reports.

The conflict has damaged Dubai’s image as a center of glitz and stability, as Iranian drones repeatedly targeted the airport and infrastructure, and the Burj Al Arab hotel suffered damage from captured missile fragments.

The “luxury industry,” which lost more than 100 billion euros in market value after the pandemic, is now taking a hit. new blow.

 “The Middle East was a strategic region with double-digit income growth, but now it has been hit by the crisis,” said Carole Madjo of Barclays.

Analysts warn that the recovery will take months, even if diplomatic efforts succeed. The effects of the conflict, rising oil and travel prices, inflation and a possible stock market decline, could also weaken consumer demand outside the Gulf, particularly in the United States.

LVMH, Kering and Hermès are expected to report quarterly results this week, and the impact of the conflict is expected to be more visible in their half-year earnings. Dubai, with its low labor and tax costs, remains one of the most profitable “luxury markets”, with annual sales per square meter many times higher than the global average. /tesheshi.com/

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Source: prizrenpost