KUWAIT, 10 March 2003 — In happier times, Madam Mona’s boutique would have been full of wealthy women looking at her lavish line of lingerie.
These days, her shop is empty and her sales have plunged 70 percent in the past few weeks.
Kuwaitis enjoy enviable lifestyles, but some retailers say the threat of war in Iraq has temporarily cooled their love affair with luxury.
“Why should any woman want to buy something like this? It’s not important,” said Mona, 38, gesturing at a rail of crimson baby doll nightdresses priced at 27 Kuwaiti dinars ($90.15) each.
“The most important thing is food, to keep money,” she said, leaning on the counter of her store in the Salhia Mall, one of the most exclusive shopping complexes in Kuwait.
Some stores played down war jitters, but most retailers said Kuwait’s more cautious mood had caused a dip in demand for top of the range goods in a country where shopping is a major pastime.
While there is no sense of panic, there is a degree of uncertainty among the 2.3 million inhabitants of Kuwait, which would serve as a major launch pad for any invasion of Iraq.
Shopping is a source of fun that at least one Salhia patron was reining in with regret.
“We’re just fed up,” said Raja Fahd, an immaculately-attired housewife who now confines herself to window shopping with her sister in the mall packed with Louis Vuitton, Kenzo and Hermes gear.
“Even these are old clothes you see us with, this is from last summer,” she said, pinching her white blouse, a Cartier watch glistening on her wrist.
Retailers say Kuwait is one of the biggest consumers of luxury items per person in the world — one company estimates women spend $500 to $800 a month on perfume and beauty products alone.
Despite the glitz, there is no getting away from the threat of war. The government assures people they are protected against any potential Iraqi missile strike. Newspapers say the state has imported gas masks to counter a possible attack by chemical or biological weapons.
Assurances aside, some big spenders are preparing for the unexpected — perhaps choosing to postpone splashing out on that latest gold watch or designer handbag until uncertainty lifts.
“They have reduced purchasing luxury items and are concentrating more on necessities — especially food and medicine — that you can say for sure,” Faisal Al-Mutawa, a board member of Kuwait’s Chamber of Commerce and Industry, told Reuters.
“If it’s a quick war as we expect, then things will be booming afterward,” said Mutawa, whose family businesses sell a wide range of goods from consumer products and household appliances to pharmaceuticals.
Other retailers are more upbeat, pointing to crowds thronging many of the malls in Kuwait City, a sprawl of six-lane motorways, gleaming skyscrapers, decrepit 1960s-era office blocks and futuristic-looking towers.
Some expatriates have left, unnerved by a series of attacks on Americans and warnings from embassies of a possible threat from extremists, but they were only a small slice of a much bigger pie.
“The real market is locals and their spending power is still very important,” said Anthony Chalhoub, managing partner with the Habchi & Chalhoub retailers, which he described as the biggest luxury firm in Kuwait. “Everybody’s relaxed.”
Chalhoub said his stores, which sell brands including Rolex and Chanel, S.T. Dupont and Chopard, were ahead of sales targets. He plans to open 12 new shops in Kuwait this year.
In the long run, it would take a major economic disaster to wean Kuwaitis away from their pursuit of the finer things in life — even if there is some temporary decline in demand.
Habchi & Chalhoub says the country’s luxury goods market grows an estimated five to six percent a year — a level they expect to maintain in 2003.
In the future, Kuwaiti businesses hope that any change of government in Iraq will open up a much bigger market — one with long-standing ties to its tiny neighbor.
“No agents of any luxury brands are based in Iraq at the moment,” said Walid Khozai, brand manager of the accessory section in the Beidoun Trading Company, which imports luxury items to Kuwait. “It has big potential.”
