WORLD WRAP
Qatar’s diplomatic rift
leaves the fashion industry
in a fix
WHAT DOES THE NEW TURN OF POLITICAL EVENTS MEAN FOR THIS INDUSTRY...?
Continuously as Qatar’s travel restrictions
increase and stock market tumbles, the
future of the US $ 1.3 billion fashion market
is still in the dark. Not just being a favourable
retail destination, many luxury European
Houses are backed by Qatari funds, such
as Balmain, the Paris fashion house, which
has been acquired by Mayhoola, which also
owns Valentino, highlighting the Middle
Eastern investor’s appetite for luxury. The
affluent oil-rich residents of the Gulf State
have always showcased a huge demand
for European luxury, with Qatar having the
highest per capita gross domestic product
in the world. But the political restriction
looms on its future surely for fashion!
A
s the US $ 1.8 billion Doha Festival
City retail development opened in
April this year, promising to lure both
foreign investments and tourists to the
country, little was it known that the
country would be the subject of various
embargoes. As far as the recent events
are concerned, the foreign investors
and tourists alike will not be coming
down to Qatar due to a new diplomatic
fallout, wherein Saudi Arabia, Bahrain,
the UAE, Egypt and Yemen have cut
ties with Qatar, suspending all land,
air and sea travel to and from the
country, causing Qatar’s stock market
to plummet. This was due to the news
impugning that the Qatari Government
is paying blacklisted Al-Qaeda affiliates
and Iranian security officials up to US
$ 1 billion ransom in return for the
release of members of its royal family
who were captured in Iraq. This latest
rift is one in the many that Qatar and
its GCC (Gulf Cooperation Council)
42 Apparel Online Bangladesh | AUGUST 2017 | www.apparelresources.com
neighbours have seen over the years but
the imposing economic sanctions this
time have raised alarm about what this
really could mean for the Qatari market
and how it will affect the luxury goods
industry.
Despite its small size, Qatar has heavily
invested in the global luxury sector as
the wealth fund – Qatar Investment
Authority – is the owner of department
store Harrods, while state-backed
conglomerate Mayhoola has significant
stakes in brands including
Valentino, Anya Hindmarch and Balmain
and most recently, it was rumoured to
be eyeing Jimmy Choo as a potential
acquisition target. But apart from the
foreign investment and the markets
they serve, its domestic businesses in
Qatar itself are more vulnerable due
to this political fallout. The recent
political situation in Qatar may just
not only affect the domestic business
and retailers but also the tourists