Luxury brands in the GCC (page 3 of 3)

What will happen with the WTO is the freedom to choose their local partner. It will be easier to exit relationships that are no longer working to the benefit of either party. But the franchising model will continue to remain strong in the Gulf - forever.

New alliances

Indeed, many new alliances could happen sooner rather than later. Some US brands, put off by the Saks and Harvey Nichols experience in Saudi Arabia, may think again once their Dubai stores go live. But they had better act fast, since space at all the major mall developments has been taken up.

Industry watchers believe that the next wave of new brands will come with the opening of Dubai Mall - being developed to be the worlds biggest by Emaar Properties. The mall is expected to open some time in 2006. The nature of Dubai's hugely competitive mall business requires Dubai Mall to come to market with some of the biggest names in the retail industry to befit its status, said the official with the research agency.

We believe that some of the bigger US brands, including those already present in the region and some which are unrepresented, will seriously consider Dubai Mall as it offers the last possible space for prime location in Dubai. With Dubai getting all the attention, what of the chances of Kuwait and Bahrain in luxury retail?

Kuwait is currently reaping a tentative peace dividend, which has led to some major moves in mall development. Bahrain, too, is witnessing heightened activity, and new retail space is being developed. But both markets are yet to get the tourism dollars coming in the way that Dubai has.

Moreover, who would even consider Kuwait as a holiday destination? asked the official at the research firm. Bahrain, on the other hand, stands a much better chance with its Bahrain Financial Harbour project, which could bring hundreds of white-collar professionals into the country for long-term residence. It also has certain charms on the tourism front. But the government has to do more.

As for Saudi Arabia, will the current circumstances jeopardize future prospects? Industry sources are forecasting another year of contraction for the luxury market. It is a long road to recovery for the kingdom, and during that time the rest of the Gulf states will advance rapidly in the retailing sphere.

But Saudi Arabia's large population base and the captive tourist numbers provided by the annual pilgrimage should provide some respite, predicts the research firm. All of this leaves Dubai in a seemingly unassailable position. Although there is, of course, the small matter of convincing Wal-Mart to finally make its long overdue entry.