Luxury goods sales across the United Arab Emirates (UAE) have dropped sharply amid regional instability stemming from the Iran conflict, with Dubai among the worst-affected markets.
Boutiques at the Mall of the Emirates recorded year-on-year sales declines of between 30% and 50% in March while overall footfall at the venue fell by 15%, according to sources cited by Reuters.
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Dubai Mall saw even steeper deterioration, with traffic down 50%, pointing to a potentially deeper contraction in purchases.
Abu Dhabi’s Galleria mall proved more resilient, though sales there still declined by around 10% over the same period.
The affected retail destinations house flagship stores from some of the world’s “largest” luxury conglomerates, including LVMH, Kering and Richemont, as well as individual brands such as Cartier, Chanel, Dior, Gucci, Louis Vuitton and Rolex.
None of the mall operators or brands responded to Reuters‘ requests for comment.
The disruption follows a prolonged downturn across the global luxury sector.
Since China’s post-pandemic recovery lost momentum in 2022, the combined market capitalisation of LVMH and Kering has shed more than €100bn ($117.82bn) – equivalent to over a quarter of their peak value.
The current strain in the UAE was triggered by US and Israeli strikes on Iran on 28 February, which destabilised the wider region and prompted drone attacks on infrastructure in Dubai.
Although the Middle East accounts for a relatively modest share of global luxury consumption, the financial consequences for major brands could be disproportionate.
Dubai is considered one of the most commercially attractive markets in the sector, owing to low operating costs, elevated retail pricing and minimal taxation.
Industry sources expect recovery in the region to take several months, even if diplomatic efforts bring the conflict to a close in the near term.
