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Closure notice for renovation leaves Dubai Mall gold retailers puzzled

Gold souk shops given until September 4 to close with no word on future

Image Credit: Zarina Fernandes/Gulf News
The Dubai Mall’s gold souq wears a deserted look. Retailers who still remain say they have received notices from mallauthorities to close their shops to enable renovation, but have not been told for how long or what will happen after completion.
02 Gulf News

Dubai: Retailers in Dubai Mall's gold souk have been given just over three weeks to close up their shops for renovations.

The notice, which was delivered a week ago has informed outlets in certain areas of the gold souk that they have until September 4 to leave.

According to Chetan Dhakan, owner of National Jewellery and two other shops in the gold souk, the renovations have been in discussions for about a year now. This is the first time, however, that they have received an official notice.

"We are not sure if this will happen for sure. They are always changing their minds and there is talk that it might be delayed," said Dhakan.

He added that around 30 shops situated in certain areas of the gold souk, such as Caravan Court, have been given notices.

The notices are unclear as to what kind of renovation will take place and retailers have not yet been told what will happen to their shops after the renovation and how long the work is expected to take.

Retailers in the dark

"We have heard from others that they are going to break down the walls and open up the entrances so it's more accessible, but we don't know exactly what is happening," said Affan, a showroom manager at Mahallati Jewellery.

When contacted, Emaar, the developer behind Dubai Mall, was not available for comment.

Affan said this closure comes at an unfortunate time.

"Sales right now are slow, as they usually are at around this time of the year. Our high season is after Eid and until December and we will lose those months due to this renovation," he said.

A walk through the souq reveals a deserted look. According to shop owners, many of their neighbours left without paying the remainder of their rents. Emaar is still trying to chase them up through the Dubai Municipality Rent Committee.

"All the owners of the shops surrounding mine have run away. We all signed three-year contracts but they couldn't afford to pay, so they just left," said a retailer in the northern part of the gold souq, which is predominantly closed.

Gold prices have been climbing steadily over the past few months. On Tuesday, prices went past $1700 (Dh6243.5) per ounce, continuing on to record highs. As a result, gold sales have dropped, especially during the month of Ramdan, which traditionally sees less shoppers.

The volume of retail gold sale in Dubai and Abu Dhabi dropped by around 10 per cent in April according to a previous Gulf News report.

A retailer, who did not want to be named, said a reason for the souk not doing well was its structure.

"It's like a maze and in a space with 270 outlets, there's not a single rest room. It's a really bad design," he said.

At its launch, the gold souq was highlighted as one of the key attractions of Dubai Mall.

The area was designed by Northpoint architects and aims to recreate the traditional structure of an Arabian souk with its meandering corridors and themed courtyards.

200 per cent hikes

Retailers also have to face higher rent levels if they are looking to renew their contracts. According to the retailer Gulf News spoke to, shop owners have been informed contract renewals for another year will entail hikes in rent and they will have to take up bigger retail spaces than the smaller ones that are available now.


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Latest Comment

Yesterday, i went to Gold Souk and i couldn't find the appropriate ingot bars. Most of them were saying "Gold is finished, Every body is buying it".Considering this, how come the sales of gold has dropped?

Ahmad Ali

10 August 2011 12:58jump to comments