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American retailer's store in Burjuman is to close after 12 years
American luxury retailer Saks Fifth Avenue plans to close its Dubai store in the third quarter of this year, its Canadian parent company said.
Saks Fifth Avenue opened the 80,000 square foot (7,432 square metre) department store in Dubai's Burjuman mall in 2004, selling designer clothes, shoes and accessories for both men and women.
The store was part of a licensing agreement signed in 2003 between retailer Saks Incorporated and Style Avenue Middle East, a partnership formed between local United Arab Emirate (UAE) retailers Al Mana Group, Chalhoub Group, Damas Jewellery and Kapico Group.
This week, Hudson's Bay Company (HBC), the Canadian company which bought Saks Fifth Avenue as part of a $2.9 billion deal in 2013, confirmed the licensing agreement had not been renewed and it was planning to close the store.
"Our licensing arrangement for this location expires this fall and we will be closing the store August 31st," an HBC spokesperson told Zawya by email, but declined to give any further details or confirm if another potential license holder was being looked at.
An official spokesperson for Burjuman mall confirmed the store is to close: "We can confirm that the lease agreement with Saks Fifth Avenue is approaching its natural conclusion," said the spokesperson, who preferred not to be named, adding that the space will be incorporated into the mall's expansion plan announced three years ago.
The Burjuman outlet was the last remaining Saks Fifth Avenue store in the UAE. The retailer closed its anchor store at 'The Walk' in Dubai's Jumeirah Beach Residence in 2010, just two years after it opened, and replaced it with a discount outlet store selling Saks Fifth Avenue products from previous year's collections.
Style Avenue Middle East also operates a Saks Fifth Avenue store in Bahrain City Centre Mall in Manama. The HBC spokesperson declined to comment on the long-term status of the Bahraini store and a Style Avenue Middle East spokesperson was not available for comment.
The announcement comes as retail analysts warned of a slowdown in growth in the sector this year, mainly due to the stronger dollar, to which the UAE dirham is pegged, making goods more expensive, and reduced spending levels by European and Russian tourists.
The local UAE market is forecast to grow 7 percent year-on-year to $53.7 billion in 2016, compared to a growth rate of 8 percent in 2015, according to a report published in December by Gulf News, citing data from consultancy firm Euromonitor International.
© Zawya 2016
