Dubai's luxury stores take hit as Mideast war drags on

Salespeople in immaculate suits say they have been told not to speak to reporters, but one briefly described the mood.

"Of course, there are fewer customers, especially tourists," the salesperson told AFP. "Locals still come.

"Luckily, we have a strong local clientele and no one is panicking."

This glamorous playground for the world's rich has taken a hit since the start of the US-Israeli offensive against Iran on February 28.

Dubai, long known for its peace and stability, has been targeted frequently by Tehran's retaliatory drones and missiles, sending tourists fleeing.

One industry figure, requesting anonymity, said the prevailing belief was that "the situation is temporary and will improve soon".

Just out of Chanel, one of the few shoppers put it more bluntly: "People shouldn't come (to Dubai) right now."

"It's dangerous, it's war. For me it's different. I'm from here -- if I die, I die with my family," she said, dressed in a black abaya and niqab and carrying an orange Hermes bag.
Monument to bling
The Middle East, one of the few regions where luxury sales are still growing, accounts for six to eight percent of global revenues for top brands, according to Bernstein analysts.

They estimate that the region's luxury sales will fall by half in March, mostly due to the collapse in tourism -- both to the Gulf and in transit, with major air hubs like Dubai, Doha and Abu Dhabi closed or operating at diminished capacity.

More than half the region's luxury stores are in Saudi Arabia and the UAE.

The most profitable ones are clustered in Dubai Mall, a vast shopping complex that sits below Burj Khalifa, the world's tallest building.

With its waterfalls, massive aquarium and more than 110 million visitors a year, the mall, a monument to bling, claims to be the most visited place on the planet.

No tour groups drifted through its wide, air-conditioned corridors on a late March evening, but the regulars were out.

And more shoppers were lining up at Primark -- a newly opened budget chain -- than inside the mall's glitzy "Fashion Avenue" area, lined with chic luxury chains.
Like Covid
To avoid "unnecessary alarm" and protect the UAE's reputation, the mall's developer Emaar has warned retailers against closing or shortening work hours, the company said, in a note to the shops seen by AFP.

Foot traffic has "collapsed", Bernstein analysts note, and several brands have shifted staff to online outreach.

The strategy works well, they say, in a region teeming with wealthy customers with "little else to do but shop" -- "like during Covid".

Hoping for a quick end to the conflict, the industry is also counting on a wave of "revenge spending" -- customers splurging in relief once the situation improves.

But "the key is the return of tourists", the industry figure said.

The worst-case scenario, he warned, was a lengthy conflict with sporadic attacks across the Gulf, which could damage Dubai's long-term appeal.

At the Mall of the Emirates, even the famous indoor ski slope was nearly vacant.

Bundled in thick parkas to withstand the cold, employees stood about as the ski lift turned almost entirely empty, waiting for tourists to return.