By  on March 15, 2011

MILAN — As part of a strategy to directly control its stores, Gucci said Monday it has signed a memorandum of understanding to form a joint venture with luxury retailer Al Tayer Insignia.

The agreement, which is expected to be finalized over the next few months, will allow Gucci to directly enter the United Arab Emirates. Gucci declined to provide details of the partnership, but said the joint venture will be headquartered in Dubai. Al Tayer has been Gucci’s franchisee in the region for more than a decade.

The luxury brand currently counts six points of sale in the UAE. One store is located in Abu Dhabi, at Marina Mall, and three boutiques are at the Mall of the Emirates, at The Boulevard at Jumeirah Emirates Towers and at The Dubai Mall in Dubai. Gucci is also present at Dubai’s Harvey Nichols and Bloomingdale’s with corners in the two department stores.

Despite the recent turmoil in the Middle East, Gucci is forging ahead with its plans. “This is a dynamic region of the world, where Gucci products have been appreciated for many years thanks to the brand’s unique balance of luxury heritage and fashion authority,” said Patrizio di Marco, the company’s president and chief executive officer. “The decision to establish this venture in such an important market is consistent with Gucci’s stated objective to further reinforce its direct retail network, which today numbers 317 stores worldwide.”

Part of Al Tayer Group, a UAE-based diversified business conglomerate, Al Tayer Insignia operates more than 35 international luxury brands and nearly 80 stores in the region, including Bloomingdale’s and the largest Harvey Nichols outside the United Kingdom at the Mall of the Emirates in Dubai. Headquartered in the UAE, it also has operations in Bahrain, Saudi Arabia, Lebanon and Qatar.

“Having introduced the brand in the UAE in 1999, it gives us immense pleasure to see the phenomenal success of Gucci in the market. We are enthusiastic about this strategic development in our relationship,” said Khalid Al Tayer, chief operating officer of the group.

The agreement with Al Tayer is only the latest step in Gucci’s ongoing retail strategy. In December 2009, Gucci entered the Indian market with a directly owned store in New Delhi via a joint venture with entrepreneurs Reena and Ashok Wadhwa. Gucci held a 51 percent stake in the business, the maximum allowed to foreign companies in India.

Gucci has also been investing in its own stores, buying back its franchisees whenever possible, as in Munich in 2008. Since last year, it directly owns eight sales points at Saks Fifth Avenue and in December the firm directly entered the Greek retail market through a joint venture with local partner Charagionis Group, following a multiyear franchisee relationship with the same company.

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