PARIS — Qatar’s ambition to compete with Dubai as an upscale, international hub is taking dramatic shape.
This story first appeared in the February 13, 2008 issue of WWD. Subscribe Today.
The Pearl — billed as a Riviera for the Middle East — is a man-made, figure-eight-shaped island overlooking azure waters and complete with 280,000 square feet of retail space for luxury fashions.
Among European firms that are said to have already confirmed intentions to open freestanding shops are Hermès, Giorgio Armani, Bulgari, Jimmy Choo, Jean Paul Gaultier, Loro Piana, Yves Saint Laurent, Chloé, Fendi and Balenciaga.
“People here can afford to spend money on luxury fashions,” said Khalil Sholy, United Development Co.’s managing director, anticipating retail productivity of $2,500 a square foot. “Qatar has been expanding and growing economically over the last five years. This has created a lot of interest for people to come and invest.”
UDC, which is investing an estimated $6 billion to construct the 985-acre island linked by an eight-lane causeway to Doha, is keen to make The Pearl the “ultimate destination for luxury goods” in one of the wealthiest Gulf states.
“It was really eye-opening to go there and see the development,” said Robert Burke of New York-based Robert Burke and Associates, who is teaming with Paris-based buying office Mint SA to assemble a Who’s Who of international brands. Burke was joined in an interview by Mint principals Jean-Philippe Prugnaud and Mindy Lin Prugnaud.
Per capita income in Qatar stands at approximately $75,000, and The Pearl — with its two circular harbors ringed with luxury residences and a marina for almost 1,000 yachts — will ultimately be home to some 50,000 residents, along with luxury hotels, eateries and cultural attractions to fuel tourism.
Sholy acknowledged Qatar is not yet as developed as Dubai in terms of retail and attractions, but asserted The Pearl would help Doha leapfrog on to the international radar. UDC anticipates up to 2.5 million visitors a year and has already sold residential units — a mix of high-rise apartments, penthouses and town houses — to European and American nationals.
Sholy also trumpeted the country’s pro-business stance and progressive attitudes that “allow women to play a leading role in society.”
The Gulf nation, with a young population of approximately one million people, possesses the world’s second-largest reserves of natural gas and produces 3.7 billion barrels of oil annually — an output expected to last 23 years. But business leaders, witnessing the rapid development of Dubai as a resort destination, are eager to diversify the nation’s economy, foster tourism and capitalize on the surging demand for luxury goods.
The Pearl’s 1.6-mile boardwalk of roughly 1,000 shops, restaurants, clubs and other attractions is slated to open in phases and be completed in December. Burke and the Prugnauds said they envision several clusters of European and American brands, along with a multibrand superstore for luxury footwear, accessories and cosmetics called Royal Avenue. Plans also call for contemporary fashion and jeanswear zones to round out the fashion offer.
The first phase of the retail development, which calls for a total of some 200 freestanding fashion boutiques, is slated to open in September. Among other glittering attractions on the island are Ritz-Carlton and Four Seasons hotels and such fashionable eateries as Bice, Armani Caffe and Nikki Beach.
The Pearl is the latest retail addition to a region that is mushrooming luxury boutiques. The Middle East still accounts for less than 10 percent of most brands’ revenues, but industry experts say boutiques there generate higher profits due to strong sales and low fixed costs in terms of rent, salaries and taxation.
“It’s as fast as China,” Michael Burke, chief executive officer of Fendi, which is posting growth rates of between 30 to 50 percent in the region, told WWD last month. “I’m very bullish on it — much more bullish than India.”