The Middle East's fashion watchers are expected to splash out this year and give the regional industry a brighter look, a new study says. The local branch of the French fashion university, Esmod Dubai, forecasts that revenues in the region's fashion sector will grow by 15 per cent this year. This surge in the market, worth roughly US$12 billion (Dh44.07bn) across the Gulf, will be spurred on by mall openings and the arrival of international fashion houses and retailers to the region, said Tamara Hostal, the director and founder of Esmod Dubai.
"It's the evolution of the market," she said. "It is the multiplication of the malls, which are encouraging people to look at fashion, and all the major brands which are coming to Dubai." Two of the newcomers are Giorgio Armani, the Italian fashion house set to open its first hotel as well as shops in the Burj Khalifa on March 18, and Bloomingdale's, the US department store that will open its first international outlet on February 1 in Dubai Mall.
Ms Hostal expects this growing fashion culture in the Middle East to translate into a bigger appetite for designer brands. Laurent-Patrick Gally, a retail analyst with Shuaa Capital, said the industry's double-digit growth rate bodes well for retailers and potential investors. "In these current economic times, an industry where you have 15 per cent revenue growth should be worth looking at." While the surge will help retailers' revenues, it may not lead to profits for investors in publicly listed regional retail companies, such as the Saudi Arabia-based Fawaz Alhokair or the Kuwait-based Villa Moda.
Profits in the short term are under pressure from the expensive, long-term leases with shopping centres that were signed during the retail boom, said Mr Gally. "From a revenue perspective, an increase in sales of fashion items and clothes is good for groups such as Alhokair, but it doesn't necessarily mean it falls straight into earnings." @Email:firstname.lastname@example.org