The UAE is consolidating its reputation as one of the principal markets for luxury goods. Global information consultants Bain & Company recently reported that the revenue from luxury goods in the Middle East will grow by 15 per cent this year, making it the 10th largest market in the world. The report said that global luxury goods are resisting turmoil in the Euro zone and the fears of a slow-down in emerging markets. This statement receives support from the rapid expansion of major Italian fashion brands in the UAE over the last several months including such names as Prada, Ermanno Scervino, Cruciani, Brioni and Vhernier, among others. Interestingly, these brands are not simply expanding to the region due to increased sales, but also because of the immense opportunities for creative growth.
“The Middle East is one of the most sensitive markets when it comes to the importance of quality and respect for style,” explained Luca Caprai, founder and CEO of Italian knitwear brand Cruciani. The brand, popular with celebrities this past year for its “four-leaf clover” bracelets, each of which symbolizes a particular quality such as reputation, health, love and wealth, launched its first boutique in the Middle East in BurJuman in February last year and its second store, Cruciani C, at The Dubai Mall in October. When asked about the potential of the region’s luxury market, Caprai stressed his desire to expand his brand further within the Middle East, not just because of the region’s potential for luxury goods, but for the creative synergy that the market offers. “I came to Dubai often during the crisis,” noted Caprai. “What surprised me most is that over the span of just two years, I’ve seen Dubai come back; one hardly feels the crisis any more. Dubai is now outside the danger zone. I never expected the city to come back to life so quickly.”
Cruciani hasn’t been the only Italian label taking advantage of this positive current. “Markets with continuous growth and with a demanding and sophisticated clientele are always keen on Italian excellence,” said Ermanno Scervino during the inauguration of his boutique in Dubai’s Mall’s Fashion Dome. Brioni’s CEO Francesco Pesci shared the same thought. “We decided to open in Dubai because of the current importance of this market. We have just inaugurated our first boutique in Riyadh and we are focusing on strengthening our presence in the Middle East while still remaining faithful to our reputation for fine materials and tailored clothing.”
Prada and its younger label, Miu Miu, have been present through a joint venture with partner Al Tayer Insignia at Saks Fifth Avenue in BurJuman Shopping Centre since 2011. In June 2012, Prada opened its largest boutique in the UAE. The shop, located in Dubai’s Mall of the Emirates and designed by architect Roberto Baciocchi, covers 1,140 square metres and is the third largest in the world. “We are expanding to Morocco, Istanbul, Beirut, Dubai and Qatar,” Prada CEO Patrizio Bertelli said in an interview with Bloomberg Television. Demand for Prada’s leather goods and other items has been growing significantly, and the UAE market is seen as a great platform for the further development of the brand.
“Expanding to the Middle East and, specifically Dubai, has proved to be the right step forward,” commented President of Italian jewellery brand Vhernier, Carlo Traglia, which opened its first boutique in the region in partnership with AW Rostamani Lifestyle in October 2012 in The Boulevard, Dubai’s sleek luxury shopping area in Jumeirah Emirates Towers. Traglia underlined that he was also taken by the immense possibilities for creative growth within the region, specifically regarding the realm of the Middle Eastern Contemporary art market which is quickly gaining recognition within the international art community.
This eagerness to indulge in the UAE’s Contemporary art market is also shared by Caprai. “Dubai is like a window through which one can see the Middle East, like Hong Kong for China – it is the gateway through which to understand the culture, style and creativity of the region,” he said. Thus, while these brands certainly flock to the country with aims to increase their sales, it is also creativity and the region's entrepreneurial spirit which has similarly lured these brands. “Brands must now manage an even broader diversity of consumer preferences, and more variations in their model of how to take products to the market,” said Claudia D’Arpizio, a Bain partner in Milan. Dubai, as we have seen, has been a gateway and a portal for new luxury goods players. It gives brands important indications on how to expand their brand, their market reach and also, the creative and artistic potential that the market craves.