Dubai: Limited Brands Inc., operator of the Victoria's Secret chain, and American Eagle Outfitters Inc. are among retailers seeking a foothold in Dubai as consumer confidence in the emirate reaches a seven-year high.
Sales in Dubai are up about 10 per cent this year, according to store companies such as Rivoli Group, which sells watches from brands including Tissot, Burberry, Gucci and Cartier. US retailers, traditionally reluctant to enter the region, are coming to Dubai as sales in their domestic markets and other fashion capitals remain subdued.
"There are more people in the malls here in Dubai than anywhere else in the world," said Sheeraz Hassan, founder of Millions of Milkshakes, which will open its first branch outside the US this year. "We wanted to show the West that Dubai is the place to be."
Consumer confidence in the UAE, the second-biggest Arab economy, is the highest since 2004, according to MasterCard Worldwide Index of Consumer Confidence released on August 18. Confidence was 95.6, compared with 73.6 six months ago, exceeding markets such as China and India. The score is calculated with zero as the most pessimistic and 100 as most optimistic.
Dubai is the second-most attractive emerging market for retailers after China, in part because of high disposable income, according to management consulting firm A.T. Kearney.
Retail accounts for 30 per cent of GDP in the emirate, home to about 40 shopping malls, Standard Chartered Bank Plc estimates.
Williams-Sonoma Inc., the 55-year-old housewares chain that owns Pottery Barn and Pottery Barn Kids, opened the first stores outside North America and Puerto Rico in the emirate last year. Bloomingdales, owned by Macy's Inc., also opened its first store outside the US in Dubai in 2010, while Victoria's Secret and American Eagle Outfitters opened stores in the emirate earlier this year.
"With limited opportunities for growth in their own markets, more retailers have taken the plunge and made inroads into the region, typically using Dubai as a springboard into the region's other markets," research company British Monitor International said in a July report.
Dubai's retail industry is recovering after the global financial crisis caused sales to plunge 45 per cent in 2009, according to BMI. Retail sales in the emirate will likely increase 7.2 per cent this year, up from last year's 3.6 per cent growth, the Dubai Chamber of Commerce and Industry estimates.
