Middle East in Turmoil, Shopping Malls Turned into 'Graves'

The conflict intensifying in parts of the Middle East has prompted many people to avoid public spaces, and in Dubai and other major shopping centres across the region, many stores have closed or are operating with a limited staff as tension escalates and disrupts business. As of Tuesday, the air war between the United States and Israel against Iran continued to widen, with Tehran firing missiles and drones at Gulf states in retaliation for weekend airstrikes that killed Iran’s Supreme Leader.

Chalhoub Group, which runs about 900 stores for luxury brands including Versace, Jimmy Choo and Sephora, said its stores in Bahrain were closed, while markets such as the UAE, Saudi Arabia and Jordan remained open though staff presence was described as ‘voluntary’.

‘We operate with a limited team comprising staff who are voluntarily and feel comfortable to come to the stores,’ Chalhoub’s Vice President of Communications, Lynn al Khatib, told Reuters.

Amazon reportedly closed operations in Abu Dhabi, suspended deliveries across the region, and instructed employees in Saudi Arabia and Jordan to stay indoors, according to Business Insider on Monday, citing an internal memo.

Gucci owner Kering said its stores were temporarily closed in the UAE, Kuwait, Bahrain and Qatar.

The growth engine of luxury goods now faces a threat.

Shares in luxury groups LVMH, Hermès, and Cartier owner Richemont fell about 4% to 5.7% on Monday afternoon as investors feared further spillovers from the conflict.

The Middle East still accounts for a small share of global luxury expenditure, around 5-10%, according to RBC analyst Piral Dadhania. However, Bain & Company has said the region was the ‘best performing’ in luxury last year when handbag sales declined globally.

Airports closing are curbing tourism to the region abruptly. Missile attacks — including one that damaged the five-star Fairmont Palm hotel in Dubai — are likely to deter travellers, particularly if the conflict persists.