Dubai jewellery sales down

Dubai: Chief Executive Ronaldo Stern, the son of the late founder of international jewellery brand H. Stern, told Gulf News that the global economic slowdown is affecting business everywhere. But that did not stop him from flying to Dubai for the first time last week to unveil the Giverny collection, a new line of jewellery in 18 carat rose gold set with diamonds.

The collection, with retail prices ranging from $1,400 (Dh5,143) to $34,000, may be too expensive for many ordinary consumers in Dubai, but Stern is confident the new line will be a hit in the high-end luxury market.

"We chose Dubai as the venue of the global launch because the city is an important platform. Women here are on the cutting edge of trends. They are very in sync with what's happening worldwide in terms of fashion," Stern said.

"Besides, this is still a booming market. Of course there's a slowdown, but this is happening worldwide and I don't think there are many places that are booming like Dubai," he added.

However, jewellery sales in Dubai have dipped since the Gulf Cooperation Council (GCC) region started feeling the effects of the financial crisis. The slump has prompted jewellers to adopt a cautious outlook and slow their expansion plans.

Sales were particularly gloomy between November 2008 and January 2009, as tourist footfalls in jewellery stores and consumer spending decreased.

However, jewellers maintain the sector has not completely lost its lustre and has been less affected by the global downturn compared to other businesses, such as the hospitality sector.

Dubai is still seen as an important market and jewellers vow to continue launching new innovative products and expanding their businesses in the region this year, though at a reduced pace.

Stern says that the brand's retail sales in Dubai decreased in December and January, but started to pick up in February.

"We're not putting our head in the sand and saying that there's no crisis. There is, but we will not stop growing. If you stop, you'll go backwards.

"But we have to be more cautious with new investments, new openings. We'll be more selective in deciding where to open. Definitely, we'll not stop with the new launches, the creations of new designs," Stern said.

H. Stern operates about 160 stores worldwide and is also being sold in another 160 locations through its various partners.

In the Middle East, H. Stern has three locations in Dubai through its partner Al Tayer Group, two in Saudi Arabia, one in Bahrain and one in Lebanon. The brand will be featured in two more locations in Dubai between 2009 and 2010 and is looking to widen its market reach in Abu Dhabi, Bahrain and Qatar.

Tamjid Abdullah, deputy managing director of Damas Jewellers, confirmed that sales in Dubai started slowing down in November last year. However, he said that the overall impact had not been severe. He added that it was unhelpful to compare recent jewellery sales with those recorded in 2008.

"A good benchmark would be 2007, not 2008, which saw tremendous overall growth. In fact, sales in the first part of 2009 have seen a good eight per cent growth compared to the same period in 2007," Abdullah said.

He also confirmed that Damas, which runs about 460 shops in the region, has put its expansion plans in markets outside the Middle East on hold.

"But our expansion plans in the region, especially in the GCC countries, will continue, although at a slower pace." Abdullah maintained that jewellery remains a popular investment choice in Dubai. He said consumers still have plenty of cash to spare, but are reluctant to spend because they are constantly bombarded by media stories about the gloomy economy.

"Jewellery is still and will always be the best place to park your money. The gold price has maintained a very high level even in these bad times. This means there's still very high demand for gold. The drawback in our region is more psychological than it is financial."

"When you open the papers today, you read stories about market crashes. You don't read good news. Naturally, people refrain from buying if they read these stories. But sooner or later, they look around and see that things haven't changed that much. They will realise that they still have a job and they still receive their salary. Then, they will start opening their pockets," Abdullah added.

Gerald Genta, the "maestro designer" of Gerald Charles luxury watches, believes despite the downturn, Dubai's consumers still have a huge appetite for opulent spending.

Genta was also in town last week to launch his latest collection of designer timepieces. "Dubai is a very important commercial centre. It's not only a significant market for the GCC region, but it serves as an international venue for tourists as well. Tourists from various countries come here to have a holiday and go shopping," Genta said.