Many luxury brands have seen a drop in sales in the UAE as a result of the ongoing conflict in the Middle East.

According to Reuters’ sources, luxury brands reported year-on-year sales declines of 30-50 per cent at Dubai’s Mall of the Emirates in March.

Footfall at the centre, which houses shops from Louis Vuitton, Dior, Gucci, Cartier, Chanel and Rolex, fell 15 per cent during the month.

At Dubai Mall, traffic was down approximately 50 per cent, indicating a potentially even larger sales drop.

The situation is less pessimistic in Abu Dhabi, given that the city is less reliant on tourist spending. Sales at the Galleria mall were down about 10 per cent across the board in March.

The Middle East accounts for roughly 5 per cent of global luxury consumption, with double-digit annual revenue growth recorded in recent years. 

The conflict in the region, which started with US and Israeli strikes on Iran on February 28, has certainly impacted this growth.

Louis Vuitton parent LVMH recently reported a 6 per cent decline in first-quarter revenue, amid disruption linked to economic uncertainty and the situation in the Middle East.

Gucci parent Kering saw retail revenue in the Middle East decrease by 11 per cent in its first quarter. Hermès also recorded a 6 per cent drop in the region, with notable impact in the UAE, Kuwait, Qatar and Bahrain.

Reuters cited analysts that the conflict’s ripple effects, including higher costs for oil and travel, as well as inflation, could disrupt shoppers’ appetite.

Getting back to normal will take months for the hub, even if diplomatic efforts succeed in bringing an ​end to the conflict in the near ​term, the analysts said.

• Further reading: Ulta Beauty makes UAE debut with first store at Mall of the Emirates.