London // The world’s top luxury brands anticipate a retail boom in Iran should sanctions be lifted, with the Italian jeweller Bulgari saying the country stands to be “the next big thing in the Middle East”.
The clock is ticking on a deal between Iran and six world powers to curb Tehran’s nuclear programme in exchange for sanctions relief, ahead of a June 30 deadline for a final agreement.
The watch maker and jeweller Bulgari anticipates a golden opportunity should the political agreement be sealed and the country open up to foreign brands – and said it could open boutiques in Iran just as it has in Abu Dhabi and Dubai.
Jean-Christophe Babin, the chief executive of Bulgari, said Iran’s vast population – which numbers almost 80 million – holds an appreciation of luxury informed by “centuries of culture and architecture”.
He told The National: “It’s very wealthy and you have a population in Iran which has been used to luxury. Iran will be the next big thing in the Middle East … We were active in Iran years ago. So we know the market, and we have plans for that market.”
Business chiefs from the Emirates said earlier this month that a successful nuclear agreement with Iran would be likely to boost the UAE’s existing trade with the country, which is worth nearly Dh100 billion.
Local companies such as Rotana, RAK Ceramics and the BinHendi luxury goods group all foresee growth opportunities there. Iran is known to be flooded with fake luxury goods from the likes of Armani, Rolex and Dior, partly due to international sanctions that date back to 1979.
But luxury international brands say the lifting of sanctions could spell a windfall through sales of genuine items – undeterred by a warning in February by the supreme leader Ayatollah Ali Khamenei that Iranians should “should not go after foreign products”.
Jean-Paul Girardin, vice president of the luxury Swiss watch maker Breitling, said the company hopes to take advantage of any opportunity in Iran.
“We are not that strong [in Iran], even though historically speaking we were always there. But it has good potential for growth for Breitling,” he told The National. Breitling currently has 10 boutique shops in the Middle East, including three in Dubai, and Mr Girardin expects to open “two or three” more in the region by 2020.
Aside from the prospect of a new market opening up the other side of the Arabian Gulf, Mr Babin said Bulgari also sees opportunities in the UAE.
He sees the potential for two more – one in Abu Dhabi and one in Dubai – to open by 2020.
Bulgari’s parent company LVMH has partnered with Abu Dhabi’s Tourism Development & Investment Company (TDIC) to build a luxury mall on Saadiyat Island.
“We are mall-driven,” said Mr Babin. “It’s not that we can create our boutique in the middle of nowhere or on the street, because there is no street business in the Emirates.
“My bet is that by 2020 – besides Saadiyat Island in Abu Dhabi, which is pretty sure – there will be another big mall in Dubai.”
Bulgari expects double-digit percentage growth in worldwide revenues this year, with Middle East sales growing faster than the global average, Mr Babin said.
“We’re investing more in advertising. This year we will revamp Dubai Mall and the Mall of the Emirates [branches], which are two major stores for us. And this, combined with more advertising … will obviously contribute to further momentum,” he said. “The region is regularly outperforming the worldwide average in terms of growth rates.”
A Bulgari Hotel is set to open in Dubai in 2018, built through a deal with the developer Meraas Holding. Mr Babin said the brand may also consider the viability of a second hotel in the Middle East, but only after the opening of the Dubai property.
“Before even considering a second hotel in the region, my only priority is to make the first one very successful,” he said. “Today the energy is on making the first one a top success.”
business@thenational.ae
Follow The National's Business section on Twitter
