Iran Conflict Shrinks Dubai Luxury Sales

Sales at Europe's largest luxury brands, including LVMH, Kering, and Hermès, have significantly shrunk in Dubai and Abu Dhabi due to the Iran conflict. In March, sales dropped by 30-50% at the Mall of the Emirates and around 50% at Dubai Mall, while Abu Dhabi's Galleria mall saw a 10% decline. This downturn is a major setback for the $400 billion luxury industry, which has already seen its value contract over the last three years. The Middle East, previously a key growth market, has been destabilized by the conflict, which began with U.S. and Israeli strikes on Iran on February 28, followed by Iranian drone attacks on Dubai's infrastructure. Analysts warn that the conflict's ripple effects, including higher oil and travel costs and inflation, could disrupt shopper appetite globally, potentially delaying the anticipated luxury market recovery into 2026 or beyond. The immediate impact on quarterly sales for LVMH, Kering, and Hermès may be limited due to the Middle East's market size, but the effect on profits, reported semi-annually, is expected to be far more significant.