Luxury brands in the GCC (page 1 of 3)

It's at the opposite end of the retail spectrum, as far from luxury as you can go. Yet even for the very top-end brands in the Gulf, the arrival of the worlds mightiest retail chain would come as a welcome sign of the times, proving once and for all that the regions retail sector is ready to take its rightful place on the global stage.

That's why everyone in the industry is watching and waiting for the arrival Wal-Mart - with its nearly 3,000 stores and $218 billion in annual revenue. We are aware of the prospects the Middle East territory may have to offer a business such as ours, said a Wal-Mart spokesman. And as with any such opportunity, Wal-Mart reserves the right to look at it and make an informed decision.

But any talk about our imminent plans for entry is quite premature. What, exactly, is Wal-Mart waiting for, and why should that matter to the regions luxury retailers? According to informed sources, Wal-Mart is priming itself for an eventual entry in the region, but the timing is far from finalized.

Apparently, the decision-makers at the retail giant want to see regional markets fully implement World Trade Organization (WTO) regulations - with their emphasis on open markets Ð before making the big move.

The reluctance of Wal- Mart to tap Gulf markets obviously means the most for low-end retailers, but it matters to the worlds top luxury retailers, too: once the big W rushes in, so will everyone else. And nobody wants to lose first-mover advantage. That explains, in part, why the action is getting ever more intense at the luxury end of the market.

Saks opens in Dubai

As Saks Fifth Avenue opens its second Middle East outlet, at Dubai's expanded Burjuman Mall, the iconic British upmarket retailer Harvey Nichols has just announced a plan of action to raise its profile in the region. New openings. Harvey Nichols has appointed a franchisee, the Dubai-headquartered Al Tayer Group, to oversee the opening of its second Middle East store at the Mall of the Emirates in Dubai, which is still under development.

The store is scheduled to open in late 2005, to coincide with the opening of the mall itself. Saks and Harvey Nichols have taken a similar approach with their Middle East campaigns. Both opened their first regional stores in Saudi Arabia within a short period of each other. And, so far, their experiences have been similarly poor, according to market watchers.

For both Saks and Harvey Nichols, operations in Saudi Arabia are reportedly suffering significant losses, buffeted by anti-Western sentiments among Saudi consumers as well as recent security concerns. For Saks, it certainly helps that its franchise for Saudi Arabia is held by Prince Walid bin Talal, one of the worlds richest men. The franchise holder for Harvey Nichols is a prominent Saudi Arabian business group.

It was never our belief that Harvey Nichols would be successful from day one of its operations being launched in Saudi Arabia, said an official with the franchisee in the kingdom. For a high-profile operation such as Harvey Nichols, and in a market like Saudi Arabia, the gestation period could be anywhere between two to four years.c In contrast, both Saks Fifth Avenue and Harvey Nichols are foreseeing a much softer landing in Dubai.

The emirates' retail sector has been passing through an unprecedented growth period in terms of new retail space development, especially at the premium end of the scale with the recent 1 billion dirham ($272 million) expansion at Burjuman, arguably Dubai's most profitable mall, and the Mall of the Emirates from Majid Al Futtaim Investments, which also owns the Deira City Center.