Gold sellers off the hook for festival

The Dubai Department of Economic Development has withdrawn a reported demand that gold retailers take part in this year's Dubai Shopping Festival

The Dubai Department of Economic Development has withdrawn a reported demand that members of the Dubai Gold and Jewellery Group, which represents more than 700 retailers, take part in this year's Dubai Shopping Festival (DSF), gold retailers say. Last week, dozens of small gold retailers said they could not afford to offer additional discounts at DSF, despite what they said was pressure from festival organisers to do so. "We are thankful that this nightmare is over. We were going to lose more than Dh50,000 a month had we taken part in the festival, in addition to the losses that we have already made over the past couple of months," said the owner of a small shop at the Dubai Gold Souk. Last month, many retailers received a letter from the department, which organises the festival, stating that they had to pay a Dh6,000 (US$1,630) annual fee to become a member of the Dubai Gold and Jewellery Group in addition to taking part in DSF - which begins on Thursday and runs until Feb 15 - and four other promotional events. All merchants taking part in the festival must offer thousands of dirhams worth of discounts in the form of coupons distributed to customers. "Retailers participated in DSF in previous years as there was plenty of business to be had. This time around there is no business," said a jewellery store manager who declined to be named. A letter that is being circulated by the Dubai Gold and Jewellery Group said: "Based on member feedback it has been concluded in consultation and mutual agreement with the Government that the group will not have an annual promotion during DSF 2009." It added that payments of Dh6,000 that had already been made by retailers would be refunded to them from Jan 14. Swapna Naiar, the general manager of the Dubai Gold and Jewellery Group, said new retailers joining the group would pay Dh2,500, while membership renewal for an existing member would cost Dh2,000. "Everything is back to normal now, as there are no conditions stating that the members have to take part in any promotion," said Ms Naiar, who claimed that the previous decision had been imposed on the group by the government department. K P Baiju, the managing director of Buz, a consultancy group to the DSF, disagreed. "The idea of linking the membership fee with the participating in the festival was the idea given to the economic department by the Dubai Gold and Jewellery Group," he said. "In December, the group had reported to us that unity among the member could not be felt any more and due to the economic conditions a best option would be to set up a festival fund and increase the membership fee." Mr Baiju added that when that strategy did not work, the DSF board contacted the economic department and asked for the joining to the festival to be optional and not linked to being a member of the group. "We never impose any kind of regulations related to the festival on retailers. In the end it's all up to them, and so far we have had a really good response from the jewellery groups, and the door is still open for more to join." [e-mail] [e-mail]