Many other offices, representative offices and stores of global brands and corporations are in a similar position, Reuters notes. In Dubai and other major shopping centers in the Middle East, many stores are closed or operating with minimal staff as the escalating conflict in the region causes chaos in business and transportation.
Chalhoub Group, which operates 900 stores for brands such as Versace, Jimmy Choo and Sephora across the region, said it had closed its stores in Bahrain, while other markets including the United Arab Emirates, Saudi Arabia and Jordan remained open, although staff presence was “voluntary”.
Gucci owner Kering said it was temporarily closing its stores in the UAE, Kuwait, Bahrain and Qatar, as well as suspending travel to the Middle East.
Luxury market stocks are falling
Shares in luxury groups LVMH, Hermes and Richemont (owner of Cartier) fell 4% to 5.7% on Monday afternoon as investors analyzed the impact of the conflict.
RBC analyst Piral Dadhania said the Middle East still accounts for a small share of global luxury spending, between 5% and 10%. However, the region posted “the strongest performance in the luxury goods segment” last year, while sales of high-end handbags in the rest of the world stagnated, according to consultancy Bain.
Airport closures have abruptly halted tourist flows to the region, and missile strikes, including one that damaged the five-star Fairmont Palm hotel in Dubai, are likely to deter travelers, especially if the conflict drags on.
