Dubai shopping spree stalls, retailers tighten belts

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Dubai, November 20: : lavish retail exercise after another.

This week, British luxury retailer Burberry said it had created a new firm with its UAE franchisee, Jashanmal, that would manage all its retail and wholesale operations in the Gulf Arab region.

Jashanmal Group President Gangu Batra said forming the joint venture made business sense given its long ties to the British firm but the timing could have been better.

"Now all we can say is I hope it doesn't affect us too much. There will be some effect and we will see that effect in the course of time,".

Batra said same-store sales on a yearly basis were steady at the retailer, which operates department stores, booksellers and franchises for brands like Calvin Klein, but the firm was bracing for a slowdown in the wider economy in coming months.

"People are still there but spending per person has gone down," he said. "I don't think our country will be immune to these problems.

"I can see some slowdown when I go to restaurants and hotels. The view is, so far, there's no reduction in the tourists but then when they do the booking, they do so months in advance."

According to a 2007 annual country report, visitors to Dubai represent 69 per cent of all luxury retail and leisure spending.

Batra said spending levels were likely to decline even further once the current wave of vacationers head home.

Caution has seeped into every aspect of consumer spending.

One Dubai-based dentist said business had fallen about 40 per cent this year.