Luxury sales in the GCC region are expected to experience a substantial decline this year, despite some existing brands experiencing growth, primarily driven by the tourist trade and store openings that occurred last year.

According to the retail consultant Chalhoub Group, regional luxury sales accounted for 6 per cent, totalling $12.8 billion of the nearly $400 billion market last year, with a strong appetite for high-end fashion, jewellery, and beauty products.

High-net-worth individuals from Russia and Asia have demonstrated a preference for travel spending, particularly in the luxury sector, resulting in annual and quarterly sales increases for renowned brands such as Prada and Hermes.

“Dips may be witnessed, but growth will remain,” said Max Heinemann, co-CEO of travel retail group Gebr Heinemann.

Other brands, including Dior, Saint Laurent, and Valentino, have opened stores in Bahrain over the last year. 

Spokesmen from various retail groups in the Gulf region stated that, due to recent political tensions that remain uncertain, luxury brands’ expansion requires “certainly more caution,” while they continue to see potential growth in the area.