Add

Qatar luxury retail offering grows despite limited market potential

 

The Pearl Qatar

Darwish Holding announced the inauguration at the end of this month of the Lagoona Mall in the West Bay area of Doha, on the groundfloor of two residential skyscrapers better known as the Zig Zag Towers. With a surface of 55.000 sqm and a number of 180 outlets, the total investment in the project has reached US$ 350 million.

Darwish Holding also includes a retail division which manages the exclusive distribution of luxury brands such as Rolex, Faberge, hi fi electronics brand Bose, Yamaha. Darwish also operates its own department store concept Fifty One East, the mix of which includes niche international brands such as: Derek Lam, Pollini, Temperley, Balmain, Brioni, Smalto.

The Lagoona Mall will also include an extended version of the Fifty One East department store, spread over three floors. In addition to the existing mix of brands in its main location, Fifty One East will include a shop in shop of Italian luxury menswear brand Ermenegildo Zegna and a dedicated Rolex boutique. The women’s section will include a concept store space developed by famed Parisian concept store Maria Luisa.

The Lagoona Mall is situated within a 5 minute drive from The Pearl, another major mixed use development which includes a luxury shopping centre, with stand alone mono-brand stores of: Hermes, Giorgio Armani, Canali, Roberto Cavalli, Stefano Ricci, Balenciaga, Alexander Mc Queen, John Richmond, John Galliano, Salvatore Ferragamo. Probably more successful than its retail section, The Pearl boasts a very good mix of luxury restaurants by famous Chefs: Gordon Ramsey, Bice, Mango Tree, Pampano and Tse Yang. Another important value added for the attractiveness of The Pearl is its luxury residential offering, this being the only area in Doha where foreigners can actually purchase properties. The marina of The Pearl has also been developing in the recent year, playing an important part in attracting visitors.

In case you may wonder why the top luxury brands are not all together in either one of the two projects, there is a third one, Villaggio Mall which is a mass market mall with a luxury wing. The brand mix includes top brands such as Louis Vuitton, Bottega Veneta, Burberry, Ralph Lauren, Gucci, Tod’s, Valentino. The Villagio Mall is not only at the other end of Doha, at least 30 minute drive, the shopping environment it provides being hardly luxury. Fast food outlets are within a few meters from the ”Via Domo” area which is dedicated to luxury brands. The interior design is far from a minimal standard for luxury retail.

And if the brands and confusion were not enough, a fourth major luxury retail centre is under construction, as part of the grand Musheireb complex (formerly known as DohaLand), which is being developed in the downtown area and is due to be completed in stages starting with 2014. The area dedicated to luxury shopping covers 45.000 sqm and it is spread over low rise buildings, some stores having direct street windows. The Musheireb complex will include large residential, office and entertainment spaces, including museums, restaurants and concert hall.

Considering that Doha is not a tourism destination sales of luxury goods are targetting mostly Qatari nationals and to a smaller extent expatriates. The fact that the major luxury brands are spread among three different locations is already a hassle for the wealthy consumers, especially bearing in mind the harsh climate of the country. Unless brands are united in the same location and as long as retail such as Villagio Mall do not offer an international standard luxury shopping environment, Qataris will continue to buy abroad.

The other shortcoming which contributes to the ebbing of the market potential is the fact that brands are split between several retailers which own the franchising rights, some from Qatar, some from UAE and some even from Egypt and Saudi Arabia.  This also creates a conflict of interests – for instance, Darwish is both a real estate developer (Lagoona Mall) and a retail operator and the situation is the same in the case of The Pearl, where the parent company is both a real estate developer and a retailer at the same time. Top international luxury brands have already expressed an interested to enter the Qatari market with direct operations. It remains to be seen how long this process will take and how the market will evolve over the next years.

Oliver Petcu

CPP-LUXURY iOS App