Riham
Osama buys most of her glad rags online from international websites and
has them delivered to her door.
Related
Of three brands surveyed - Mango, H&M and Zara - Mango was
similar in price or cheaper here than in other countries. Razan Alzayani
/ The National Shoppers in UAE paying 25% more for fashion
Topic
UAE
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That way, the Dubai resident from Egypt says she saves herself hundreds
of dirhams avoiding what she believes are overpriced fashion brands in
the UAE.
"I bought stuff online and got them delivered and the difference was at
least 30 per cent," she said. "When compared to a country like Egypt,
where customs and taxes are higher, the UAE is much cheaper, but
compared to Europe and the US, definitely not."
Given the tax-free environment and relatively low labour costs in the
UAE, shoppers could be forgiven for thinking the price of fashion would
be lower here than in other parts of the world.
In fact prices are as much as 25 per cent higher for brands such as
H&M and Zara, according to an analysis by The National and Caxton
FX, a currency exchange company based in London.
A patterned men's shirt, at Dh129 (US$35), is more than 10 per cent
higher in the UAE than in the United Kingdom, Italy and Ireland,
according to the analysis. A patchwork clutch handbag at Zara is as much
as 20 per cent higher in the Emirates than elsewhere, and a men's denim
shirt is 10 per cent more.
Only clothing in Switzerland was consistently more expensive than in the
UAE, the analysis found.
Of three brands surveyed - Mango, H&M and Zara - Mango was similar
in price or cheaper here than in other countries.
Analysts are divided as to why there are such discrepancies in pricing
among global brands, and they say a number of factors contribute to the
cost of a garment.
"It could be the fact that retail franchises have control to a degree
over the pricing," says Matthew Green, the head of research at the
property specialist CBRE and an expert on retail rents.
"It's currently pretty common to pay more for clothing items here.
Retailers do not give much direction of exactly why," he adds. "It's
probably down to the franchising and comparative costs."
Many retailers in the Middle East work under a franchise structure under
which they pay annual fees to the international brand names. Such fees
can often depend on sales performance.
Some local franchise retailers have control over their prices, but
others, such as Zara, are dictated by head-office policy.
"All these aspects mentioned have an influence in the price in each
market: real estate, labour costs, customs, logistics and
transportation, [as well as] purchasing capacity and competitors
pricing," says a spokesman for Zara.
"All of them intervene, none of them is remarkable. For us, the most
important point is to keep our commercial formula of quality products
with latest fashion trends at affordable prices."
When it comes to costs, retailers in the UAE pay lower rents and labour
costs than their peers elsewhere. New York, for instance, has the
highest retail rents in the world, followed by Hong Kong, Sydney, London
and Zurich.
But Dubai does not even make the list of the top 20, according to a
survey last year by CBRE.
Throughout much of the rest of the world, taxes are also added to
purchases such as clothing, which should increase the price outside the
UAE.
"The dynamics of the business here and the western world are very
different," says Vipen Sethi, the chief executive of Landmark Group, one
of the region's biggest retailers. "Each company has different
strategies on pricing and I think that's what determines the price of a
garment here and elsewhere in the world."
Landmark has a big collection of its own home-grown brands, such as
Splash, Max, Emax and Home Centre, as well as international franchises
with Reiss, New Look, Lipsy and Koton.
Ishwar Chugani, the executive director in the Middle East for Giordano,
which has more than 1,000 stores worldwide, says there should be a
maximum difference of 10 per cent between countries.
"Pricing is very subjective. It cannot be for every item you apply the
same formula," he says. "You need to see your market and competitors.
People should not get greedy and think that there's higher spend here so
you can take advantage of it."
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