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)neighbours have seen over
12 Apparel Online India | JULY 1-15, 2017 | www.apparelresources.com
the years but the imposing economic
sanctions this time has 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 that 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 spending as
well due to various travel restrictions to
the Arabian country.