x Abu Dhabi, UAEThursday 27 July 2017

Shoppers in UAE paying 25% more for fashion

Shoppers across the UAE are paying as much as 25 per cent more for major fashion brands than elsewhere in the world.

Of three brands surveyed - Mango, H&M and Zara - Mango was similar in price or cheaper here than in other countries. Razan Alzayani / The National
Of three brands surveyed - Mango, H&M and Zara - Mango was similar in price or cheaper here than in other countries. Razan Alzayani / The National

Shoppers across the UAE are paying as much as 25 per cent more for major fashion brands than elsewhere in the world.

Despite lower rents, no added taxes and negligible customs duties in the Emirates, the country is more expensive for brands such as H&M and Zara than in the United Kingdom, Ireland, Italy and the United States.

Only the fashion chain Mango was consistently cheaper in the UAE than elsewhere, according to an analysis by The National and Caxton FX, a currency exchange based in London.

Shoppers said brands could charge more because consumer spending was notoriously higher in the Gulf than other parts of the world. "I'm always shocked at how expensive clothes are," said Lindsay Johnston, an avid shopper and Dubai resident.

"[Retailers] think they can charge more," she added. "Everything is more expensive. The majority of stuff I buy now is online."

A look at more than 20 items at Zara and H&M found that prices were as much as 25 per cent higher in the UAE than in other countries.

For example, a Zara shirt here costs Dh195 (US$53). But in the UK it is selling for Dh174, at current exchange rates.

A man's jacket from Zara is considerably cheaper in France, where it costs Dh112, compared with Dh150 in the UAE.

At H&M, a child's blouse is 25 per cent cheaper in the US, and 24 per cent cheaper in Italy than in the Emirates.

"It's not just a notion. If you compare clothing brands here and in Europe for instance, there is quite a change," said Mo Heathcote, a shopper in Dubai.

Some UAE residents said they now fly back to Europe or the US to do their fashion shopping in bulk to save money.

"So many of my friends will buy things online and have it delivered to their home [abroad]," said Ms Johnston. "Whenever we go home, we are excited about spending all our money. We save a significant amount of money that way."

Analysts are divided as to why prices might be higher in the UAE, with some indicating that for luxury goods, the prices are in fact lower in the UAE.

"Luxury items here are definitely cheaper than anywhere else in the Middle East and some places in Europe including the UK," said Sana Toukan, a research analyst at Euromonitor International, an information provider.

"This is precisely why there are so many tourists flocking into the country to pick up such items to the extent that big luxury retailers such as Dior or LV [Louis Vuitton] have certain items that are constantly out of stock due to being sold out."

All the major foreign fashion brands in the UAE work under a franchise structure or joint venture with a local partner.

H&M is operated by Alshaya, which declined to comment. Azadea operates Mango and also declined to comment.

Zara's pricing structure throughout the world is determined by its head office in Spain. "We can clarify that Zara's commercial positioning is exactly the same in all markets: offering our customers quality products with latest fashion trends at affordable prices," a Zara official said.

"We fix prices in each market taking into consideration different factors, local costs structure, operative costs, local fashion sector prices, but always keeping attractive prices for our customers."

Other retailers defended pricing policies in the Gulf, indicating that a number of different factors determined the prices of garments.

"The brand owner might see their brand as superior to brand X, Y, Z in that market so, therefore, the price position affects that," said John Wartig, the finance director at Al-Futtaim, which operates Ikea, Toys 'R' Us and Marks & Spencer in the UAE.

"That's the brand perspective, but there's the cost structure as well," he added. "You can't just use the exchange-rate transfer across because the underlying cost structure needs to be taken into account."

rjones@thenational.ae

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