Apparel Group's sales during this year's Eid al Adha holiday were its biggest ever as consumers opened up their wallets and purses after months of restraint. Nilesh Ved, the chairman of the retail group that has 520 stores worldwide, including in the UAE and India, and is a franchisee for the mid-market fashion brands Aldo and Aeropostale, said Eid sales in the Emirates were up 20 per cent from the year earlier, a bigger shopping surge than seen in past holidays.
"We were surprised that Eid was so big," Mr Ved said. "People were waiting to spend money and they got in the festive mood." Retail sales in the Emirates have been dampened this year by the economic downturn, as job cuts in the region have deterred shoppers. Retailers, particularly those selling luxury wares or gold jewellery, have seen sales fall by as much as 40 per cent. But after Ramadan, consumer confidence in the UAE rose by a record 13 points, the research company Nielsen reported.
In the past few months, consumers have not seen the widespread layoffs that occurred in the first half of the year, which has eased their reluctance to shop, said Laurent-Patrick Gally, a retail analyst with Shuaa Capital in Dubai. "After nine months of belt tightening, people are seeing that things are slowly getting better," he said. "This has put back some sort of confidence that the worst is behind them. For those still here, the situation may be going back to some kind of norm, and they're resuming spending slowly."
Mr Gally said Dubai World's request for a debt restructuring last month had a minimal effect on local consumers. "From a consumer perspective, the only thing they care about is their own job situation." However, shoppers continue to shy away from luxury purchases. Mohi-Din bin Hendi, the president of BinHendi Enterprises, which holds the local licences for Hugo Boss and Gianfranco Ferre, said although Eid sales were brisk - between 10 and 15 per cent lower than last year.
"Last year was unbeatable in terms of figures," he said. "But this [Eid] was very good, taking into consideration the upheavals in the finance sector." Mr Ved, whose Apparel Group has 240 stores in the UAE, said this year overall has been tough. The group's like-for-like sales are down between 4 and 5 per cent and year-to-date profits are down between 10 and 12 per cent. However, gross sales have grown 18 per cent so far this year compared with last year, and like-for-like sales in all its markets outside of Dubai continue to grow, said Mr Ved. Same-store sales are up by 30 per cent in Abu Dhabi, 25 per cent in Qatar, 18 per cent in Kuwait, and 35 per cent in India.
"We have to realise that Dubai opened four new malls in one year, and naturally the business was divided," he said. "The traffic is there in the malls, but people are looking for deals and offers and looking for value brands. If you are a value retailer, you are OK. If you are selling anything in high-end or luxury, that's where the tough time is." @Email:email@example.com