London's luxury stores 'hurting badly' without high-spending Gulf tourists

Retailers in areas such as Knightsbridge miss Middle East customers amid UK travel restrictions

Business is eerily quiet for Lalage Beaumont, the owner of an eponymous clothing and handbag boutique at Beauchamp Place in London’s exclusive Knightsbridge area.

Her store would normally be filled with a carousel of families from the GCC, eager to snap up the latest designs from her luxury handbag collection that ranges in price from £495 ($700) to £1,400 and comes in more than 30 colours.

This summer, however, she is selling to her Middle East client base through social media or wholesale deliveries to three stores in the Gulf, because the tourists that normally flock to her store at this time of year cannot fly in amid the UK's Covid-19 restrictions on international travel.

"Under normal circumstances, my biggest sales are from the shop here and we do very, very well with Arab tourists, who are our main customer base", Ms Beaumont told The National.

“A few people are coming in who are here for medical reasons, but it's hardly anyone. I just don't know when we're going to get them back.”

Like many luxury retailers and hospitality venues in central London that cater to wealthy tourists from the Middle East, Ms Beaumont was glued to the news when the UK revealed the countries on its green list that allows travellers to enter without quarantining.

So she was dismayed to find most of the GCC, including the UAE, was on the red list, which requires travellers to quarantine in an airport hotel for 10 days, with the rest on the amber list.

“I was rather frustrated. Total sales for last year were down 77 per cent so it has been fairly dramatic because that was mainly caused by the lack of Arab customers,” Ms Beaumont said.

Lalage Beaumont

“I hope it won't be too long before we see them again but I imagine it probably won't be until Christmas. The whole of Knightsbridge is very quiet; it's been pretty dire. Places like Harrods are hurting badly and if you look at Beauchamp Place, many have closed their shops – it's very sad.”

Ms Beaumont has managed to survive the crisis, despite the store being closed for eight months during London's three lockdowns, by going direct to her Middle East customers.

She markets through Instagram and WhatsApp, shipping the handbags via DHL or relying on customers visiting the three stores in the GCC that stock her range; Tryano in Abu Dhabi, Saks Fifth Avenue in Kuwait and an outlet in Doha.

For David Bell, the founder and director of Pretty Ballerinas, which manufactures the classic ballerina shoe, the crisis encouraged him to go one step further by opening a store in Yas Mall in Abu Dhabi during the pandemic, with a second in the pipeline for Dubai Mall.

Briton Mr Bell, who is based in Menorca where the shoes are made, has not reopened his seven stores in central London since the last lockdown because of the lack of international tourists in the city.

“It’s been incredibly difficult,” he said. “Even when you could open nobody was there – there were no tourists and nobody was going to the office."

by Nicole Hains

Middle East shoppers heading to his Brook Street store in Mayfair and the Pont Street store, just off Sloane Street in Belgravia, accounted for 50 per cent of sales during July and August, with the Swarovski crystal range particularly popular.

“There are some people from the Middle East all year round because they own homes and come from time to time but the big hit comes in July and August – that's when you get the big spenders," said Mr Bell, who has stores in 36 countries.

“They'll shop for friends and family, so you'll get somebody come in and buy 20 pairs of shoes, which you just don't get with other customers."

The company’s concession store in Harrods’ children’s department is also popular, but Mr Bell said the lack of visitors has seen demand for the shoes that retail from £149 to £700 plummet across all of his London stores.

To get around this, the company opened its outlet in Abu Dhabi’s Yas Mall three months ago, with a store in Dubai Mall next and plans for a stand in the Spanish pavilion of the Dubai Expo 2020. A website in conjunction with the Abu Dhabi stores caters to the rest of the region, with the stock sourced from the Abu Dhabi franchise.

Pretty Ballerinas in Yas Mall. Marta Martinez Otero at her shop. May 25, 2021. Victor Besa / The National.
Reporter:  NA for Business

With the site set to be translated into Arabic soon, Mr Bell said online sales have grown from one pair a day three months ago to about 25 pairs a day now.

“Little by little it’s growing,” he said. “Having a store in the Middle East was a long-term desire and intention and like lots of things the pandemic brought that process forward by five or 10 years.

“Knowing that our traditional markets, like London, would be absolutely on their knees, I dedicated myself to finding extra markets."

For his London stores, however, the situation is still very dependent on GCC countries being removed from the red list – a situation reflected across parts of the city.

Walk along Sloane Street in London’s exclusive Belgravia neighbourhood and the usual bustle of activity has gone. Designer stores stand empty with just a single shop assistant or security guard on duty.

The luxury stores have also been affected by the closure of Jumeirah Group's five-star flagship hotel The Carlton Tower, which has undergone a £100 million transformation during the pandemic, along with its sister hotel, Jumeirah Lowndes, which has not reopened since the first lockdown.

Aaran Kaupp, general manager of The Carlton Tower, said the hotel faces the same lack of demand as the retailers, with less than 10 per cent of the hotel booked up in June following the reopening on June 5.

Quote
International travel is key to supporting local businesses, such as restaurants, stores and hotels.

"We all were facing the music at the same with the same kind of volume. When I speak to the various store managers around here, they are feeling the pain like we are because international travel is key to supporting local businesses, such as restaurants, stores and hotels," he told The National.

With Middle East guests typically making up 42 per cent of bookings at The Carlton Tower pre-pandemic, the surrounding designer shops and independent boutiques are not seeing the normal flurry of customers.

“They are obviously keen for us to open because having close to 200 keys, we can provide up to 400 people that will bring some kind of shopping experience to those stores around us," said Mr Kaupp.

Sergio Sergi, a shop assistant at Christian Louboutin on Motcomb Street, behind the hotel, said the luxury shoe store is “really struggling”.

“People from the Middle East really love the brand,” he said. “If they are staying close by they always want to see something inside the shop, especially our designs in gold.”

The shoe brand, famous for its handmade shoes featuring distinctive red lacquered soles, has bags on sale for between £800 and £1,500, while ladies’ shoes start at £585, but the shop assistants have no customers to keep them occupied.

“We really hope the Middle East customers come back soon,” Mr Sergi said. "We last saw them before Christmas."

Nearby at British chocolatier Rococo, shop assistant Katherine Small said the brand is coping thanks to an influx of domestic tourists visiting the capital, as well as orders from Middle East residents that stayed in their London homes.

“At Christmas we had a lot of tourists from the Middle East. A lot of them were here when lockdown happened and they stayed," she said.

To cater to Middle East demand, the company created a selection of Eid boxes, and it also produces dates wrapped in chocolate.

“People bought presents for Eid but since reopening in April we haven’t received many tourists, partly because the weather has not been great,” Ms Small said.

At popular tourist spot the London Eye, restaurateur Ibrahim Dogus who owns three restaurants dotted around the landmark, including kebab eatery Troia Southbank, said the lack of tourists is hurting his business.

Until February 2020 he enjoyed an annual turnover of £4 million, but now his takings are 90 per cent down on the same month in 2019.

“The offices are not back at work and there is no sign of any tourists coming so we are below our normal trading levels even though we have reopened,” he said.

“Normally we'll have lots of people coming from Arab countries during June, July and August, but we’ve seen literally no one. The customers coming in now work in Parliament or are down in London for a weekend from other parts of Britain.”

With Arab tourists accounting for 15 per cent of all Mr Dogus’s revenue across the three restaurants during the summer months and 25 per cent at the Troia eatery, which offers kebab and shisha, he is hoping travel restrictions will ease soon.

He normally relies on 15 to 20 staff in each restaurant during peak months but is currently surviving on seven or eight, with two workers still on furlough.

“It is a worry. We will be better positioned compared to many others, because we've been based in that location for the last 16 years, so we were prepared for rainy days, but now the money is running out," he said.

"If the business does not come back, in September we have to decide what's going to happen to our businesses."

For Ms Beaumont, social media marketing is helping to "sustain the business," and her Iraqi boutique manager who speaks Arabic is also keeping in touch with customers via WhatsApp.

"It's not even a third of the revenue we would have collected in the physical shop over the same period, though," she said.

Her boutique began to attract Gulf customers about six years ago when she expanded her clothing line to include a handbag collection.

When an Arab Snapchat blogger visited the store and recorded the experience on her phone, it led to a flood of customers.

“What surprised me was the speed at which it grew through word of mouth and social media,” said Ms Beaumont.

“It’s just grown and grown and we were doing very well prior to prior to lockdown with Arab customers buying two or three bags at a time, and even male customers coming in to buy for their mothers or sisters.”

Pre-pandemic, Ms Beaumont received up to 15 transactions from Arab customers per day in the busiest month of August. Now that figure stands at just two a week at the most.

Mr Bell said the uncertainty over international travel makes it hard for retailers in London to plan ahead.

“We have to wait until the last minute and then be very agile and reactive,” he said.

“If the offices start going back and we suddenly get one or two of our best customers [returning], such as from the Middle East, then we’d open up because there would be a reason to open the store.”

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