Dubai malls record sharp drop in sales / Photo: X / MallOfEmirates
The war in the Middle East has sharply reduced the flow of shoppers in Dubai's shopping centers, a key market for the global luxury industry, the Financial Times reports. Amid attacks and logistical disruptions, some retailers have recorded a 60% drop in revenue and warned of the risks of a prolonged downturn.
Details
Attendance at Dubai's major shopping malls has fallen sharply in the first three weeks of the conflict between the US, Israel and Iran, which began on February 28. The emirate's main department store Bloomingdale's saw sales fall 45% compared to the same period last month, according to figures seen by the FT.
At Mall of the Emirates, traffic at luxury department store Harvey Nichols fell even more sharply, by 57% since the beginning of the war. Sales in both malls for the month of Ramadan, which ended March 19, fell by more than 60% compared to the same period last year.
Italian retailers with business in Dubai reported a 35-40% drop in sales relative to pre-war levels, the FT notes. According to one of the top managers of the industry, the high cost of maintaining boutiques makes them unprofitable without full utilization: the decrease in tourist flow "throughout the year is an extremely negative scenario".
Consumer spending is a key driver of Dubai's economy. In the third quarter of 2025, the contribution of wholesale and retail trade to the emirate's GDP amounted to 25.9%, the publication writes.
Context
The GCC remained one of the few stable sources of growth for luxury brands amid weak sales in China and Europe. According to Morgan Stanley estimates cited by the FT, the region accounts for about 5% of the industry's revenue, with the UAE accounting for more than half. Among the most dependent on this market are Cartier owner Richemont and Italy's Zegna.
The conflict in the Middle East has changed the situation, with the UAE hit by missiles and drone strikes from Iran targeting US allies in the region.
Additional pressure comes from supply disruption. Iran has restricted the use of the Strait of Hormuz, and companies are forced to divert cargo through Oman and Saudi Arabia and then deliver it overland, causing truck shortages and rising costs. Insurance premiums for war risks have reached $3,000 to $5,000 per container, notes the Financial Times. Some shipments sent before the war to the Gulf states ended up in India and Singapore. One market participant called what is happening "a complete nightmare", writes the FT.
This article was AI-translated and verified by a human editor
