“The new Hong Kong is Dubai. And next will be Saudi Arabia,” Gildo Zegna, chief executive of Italian luxury group Zegna, observed to FT editor Roula Khalaf on stage at last week’s Financial Times Business of Luxury Summit.
Zegna, which listed on the NYSE combining with a US special purpose acquisition company in December, and owns both the Zegna brand and Thom Browne, is one of several luxury companies seeing a flurry of spending in the region thanks to rising oil prices, strong economic growth and a return to shopping locally. For example at Richemont, sales in the Middle East and Africa for the year ending March 31 increased 53 per cent from the previous year to €1.4bn; meaning the region has surpassed Japan as the group’s fourth-largest market.
Though only a small part of luxury brands’ overall revenues, the region is one of the “glimmers of hope” in an otherwise extremely challenging economic environment, said Neil Shearing, chief economist at Capital Economics, speaking on a panel moderated by the FT’s chief economics commentator Martin Wolf. “It is the only place you can point to that they are doing better than before.”