Published by Global Banking & Finance Review®
Posted on March 3, 2026
2 min readLast updated: April 2, 2026
Add as preferred source on GoogleThe Iran–Middle East conflict has significantly disrupted air travel and consumer sentiment in the region, pressuring luxury sales—particularly for brands like Richemont and Zegna highly exposed to Middle Eastern markets—while regional stock indices like STOXX Europe Luxury 10 have seen notable decl
MILAN, March 3 (Reuters) - The crisis in the Middle East is adding pressure on the luxury sector, which is already struggling to emerge from a slowdown in demand, with groups such as Richemont and Zegna seen among the most exposed.
Israeli and U.S. attacks on Iran and Tehran's response forced the closure of airspace across parts of the Middle East and shut key airports such as Dubai and Doha, disrupting business and travel.
The Middle East accounts for roughly 5% to 6% of global luxury sales, according to estimates from Morgan Stanley and Bank of America, with most purchases driven by tourists, particularly from Russia, Saudi Arabia, China and India.
The United Arab Emirates represents about half the sector's regional revenues, with most transactions concentrated in Dubai, Morgan Stanley said.
As on Monday, many stores in Dubai and other major Middle Eastern shopping hubs were closed or operating with minimal staff.
As luxury companies struggle to recover from a two-year slowdown, investors hope Middle East sales - a rare sector bright spot last year - can help revive the industry, as China's recovery remains weak and U.S. tariff risks add to uncertainty.
The crisis could also affect the so-called Ramadan rush - affluent Gulf residents travelling to shop in Europe and elsewhere during the month of Ramadan, analysts at Morgan Stanley said.
Cartier-owner Richemont and Italy's Zegna are the most exposed, each deriving around 9% of total sales from the Middle East, while Burberry is among the least affected.
The STOXX Europe Luxury 10 Index has fallen around 9% since Monday, the biggest two-day drop since the tariff shock in April.
(Reporting by Elisa Anzolin. Editing by Mark Potter)
The Middle East accounts for roughly 5% to 6% of global luxury sales, with most purchases driven by tourists.
Richemont and Zegna are the most exposed, each deriving around 9% of total sales from the Middle East.
Many stores in Dubai and other major shopping hubs have been closed or are operating with minimal staff.
The STOXX Europe Luxury 10 Index has fallen around 9% since Monday, marking the biggest two-day drop since April's tariff shock.
Sales in the Middle East have been a rare bright spot for the sector as it struggles to recover from a two-year slowdown and weak demand in China.
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