As conflict destabilizes parts of the Middle East, the ripple effects are already reaching the region’s luxury economy, which has become a promising growth engine for a struggling global sector.
Since the US and Israeli strikes on Iran, resulting attacks in the region have meant casualties, closed airspace, canceled flights, and warnings for travelers to leave the region. While most luxury companies are declining to comment on the situation at all, even as to whether their stores are open or closed, Dubai Mall, the key location for luxury spending in the Middle East — and where most of the biggest brands, from Alaïa to Gucci to Zegna, have presence — remains open.
In Dubai, a city where shopping is a core social activity, leaders have sought to reassure both residents and visitors that they are safe to carry on as usual; Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum even appeared at the mall last week. In other countries, like Bahrain, more stores were closed following the first attacks. City Center Bahrain, the largest luxury mall in the country, closed temporarily last week, but stores have since reopened.
Chalhoub Group, the leading luxury retailer of the Middle East, which operates more than 950 stores across top brands, says only that its risk and crisis management committee remains “fully activated” as it monitors developments. Its priority, the company says, “is the safety and wellbeing of our people, while maintaining business continuity responsibly and in alignment with local authorities as circumstances evolve”.
Before war broke out, the Middle East was “one of the few growth regions for luxury globally”, says Achim Berg, founder of independent corporate think tank FashionSights. But as can be expected, the current environment isn’t exactly motivating people to shop. “Any disruption we see will not be good for luxury companies.”
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