Recession? What Recession?

A few weeks ago, on one of the crazy summer nights about town in Beirut, we all heard a DJ at probably the most sought after open air club in the world “Sky Bar”, protest. It went like this…music stops … everything is quiet… and then the microphone screams… “They say there is a recession… we say B#@$ S%^$!!! – what recession?” and the crowd goes into a frenzy...screaming, jumping, dancing on the bars, pouring champagne left right and centre, fireworks light up the beautiful Mediterranean clear sky and the music kicks in louder and louder. According to Jetsetreport.com at Sky Bar "The crowd is a bronzed and beautiful assortment of models and playboys pouring from their magnums of Dom at tables that seem to rise out of the open-air horizon. In the background, are the electronic beats of pop anthems and dance tracks getting progressively louder as the night matures. While the rest of the world wallows in economic sorrow, things are hotter than ever at the rooftop lounge...Bottle Service is on the pricey side so don’t expect anything under 500 Euro."

Really, people who visit the Middle East and Beirut in particular this summer wonder, has the recession not affected this part of the world? Of course it has especially to those individuals and organizations who really speculated in the stock and real estate market. Beirut, however is a slightly different story. It's not so much the recession that affects the country but rather the political and economic stability - or the lack of it. With the city named the hottest destination this summer, everyone just wants their share of the fun and spending spree.

The picture changes slightly for Dubai. Many have lost loads of money in the property market; while many others have lost their jobs and the city that once has seen a massive boom, has also seen an exodus of people in the first quarter of the year.

But if you visit the region now, you’ll think on the surface, it’s all ok and that cloud of doom and gloom has vanished. Not surprising to think so when you see things have continued to pick up – especially in the retail sector. Based on sources from publications like Arabian Business and Gulf News, the Middle East luxury market is still expected to grow 15% over the next 5 years.

There seems to be a strong retailer sentiment that the Middle East market (and the Gulf in Particular) will recover faster than the rest of the world.

These are just examples of how other luxury brands have already started to take this opportunity on board:

Italy’s largest jeweller, Damiani, has identified the Gulf as a key emerging market, opening stores across Dubai, Abu Dhabi, Jeddah and Qatar.


Louis Vuitton have opened their “global store” concept in the Dubai Mall spanning an area of 645 sq mtrs and offering shoppers the full range of LV’s precious product – including the option of hand bag customization that did not exist before in the region.

Tom Ford at the Dubai Mall will too start offering their Bespoke suits – never before in the region.


Cartier soft launched their 7500 sq ft store in Dubai Mall opened by Monica Belluci and Anil Kapoor.

Apparel Group, a large retail group in the UAE, claim that they will continue to grow luxury brands if they get opportunities in key malls. For them and many other retailers its not really the recession they are worried so much about as much as it is fighting for key store locations at key malls across the country.

This is in addition to other global department stores making their debut in Dubai namely Galeries Lafayette and Bloomingdale’s the latter stretching over 146,000 sq ft.

Last but not least, Christian Louboutin will be opening the first flagship store in the region in Downtown Beirut by winter 2009 that will be among the many new luxury and high end additions; La Perla, Chloe, Dior, Gucci, Valentino, Fendi, Dolce & Gabbana, Fendi all flagships.

The Truth: We can certainly say with all these investments behind new store and debut launches, the Middle East Luxury Market is a hopeful one. Wealthy Arabs will continue to spend on luxury fashion the same way they did pre-recession – in fact now, they do not have to travel outside the region to get it.