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Vertu replica eyes growth in the Middle East as luxury market slows down
  • Dubai: Vertu replica, the UK-based manufacturer of luxurious diamond-studded smartphones, is bullish on growth prospects in the UAE despite a slowdown in the global luxury retail market, according to its chief executive, Gordon Watson.

  • Luxury goods companies in the UAE are posting lower sales growth as oil prices drop and consumer confidence weakens. Vertu's sales have been "steady" in the Middle East so far this year over 2015, Watson said, without giving actual sales figures.

  • Vertu operates 11 outlets in the Middle East---of those five are in the UAE---and has 41 points of sale

  • "In the Middle East, the immediate growth will come from Dubai ... I think Dubai will bounce back again quite quickly in the coming months. It is a unique place. You have certain tourists that have been relatively high spenders in the past," Watson told Gulf News by phone.

  • Luxury sales in the UAE were weak for most of last year, but picked up slightly during the last quarter helped by buying from Gulf shoppers. However, since the beginning of this year, the pace of decline accelerated.

  • "Several key macroeconomic events in 2015-2016 hampered the UAE retail market, with a strong impact on [the] luxury sector, due to stagnating tourist spending and suppressed local spending appetite across all segments," said Cyrille Fabre, partner at Bain and Co.

  • Watson said the company has seen increasing interest from Gulf buyers for its Made to Order service that offers customised Vertu smartphones, adding that it plans to roll it out in the rest of the Gulf countries in the next few months, after its success in the UAE. "We will continue to focus on this in terms of product development and make sure that we cover the domestic base and the opportunity that tourism brings."

  • It also plans to enhance customer service at its stores in the region this year, aside from developing its products, Watson said.

  • Meanwhile, globally, Vertu plans to launch "an entry product [in the fourth quarter of] this year to replace the Aster collection," with prices starting from 3,000 (Dh15,000), he said, adding that it targets younger consumers. Vertu's smartphones are priced from 4,000.

  • Asked if the company looks to launch new products other than smartphones, he said: "It is inevitable that we will move to the wearable space. The dominant product in the wearable space has been the Apple Watch. There's been no real competition to that ... no one's done it in a luxurious way, so that represents an opportunity. It certainly won't happen this year but it's a product that I see on the horizon for Vertu."

  • Watson sees the biggest growth opportunities for luxury retailers in China and India, where the population and middle class are expanding.

  • "These markets represent the quickest return on any potential investment," he said.

  • By Sarah Algethami Staff Reporter

  • Gulf News 2016. All rights reserved.

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