DUBAI // Movado Group, the watch retailer, plans to boost its marketing budget in the region by as much as 30 per cent this year after a slowdown in sales. The company, which has brands including Movado, Ebel and Concord, said more money had been put aside for advertising because it expected the regional economy to be among the first in the world to recover.
Efraim Grinberg, the chief executive of Movado Group, said GCC sales dropped by "low double digits" last year but were showing signs of recovery. "We are looking to expand in the region and invest our marketing dollars," Mr Grinberg said in Dubai at the end of a week-long tour of the region. "We believe it is a growth market." He said the Gulf was a priority for the group's Swiss-made Ebel brand.
Luxury watch and jewellery retailers had a tough time last year as consumers curbed discretionary spending. Sales of Swiss watches in the UAE in the first 11 months of last year totalled Dh1.4 billion (US$381.2 million), a 35 per cent drop from the year before, data from the Swiss Watch Federation showed. Movado Group's net sales in the nine months to last October were $286m, 22 per cent lower than the same period in 2008, its latest quarterly report shows.
Despite an easing in UAE sales, Saudi Arabia had single-digit growth, consistent with past years. Qatar's sales grew slightly, but Bahrain's sales dropped due to fewer tourists. Mr Grinberg said the average amount a consumer was willing to spend across all markets had dropped from more than $1,000 to between $150 and $600. The group plans to introduce more products with lower prices, he said. Other UAE retailers have also seen this switch. Ebu Berge, the owner of BEsign Jewelry, said her customers were checking price tags more closely. "I see that people like my stuff but they check the price first," Ms Berge said at the International Fashion Jewellery and Accessories Fair in Dubai. "And if it's not in their budget, they don't buy it. Before, they would eventually come back."
Yesterday's fair was also affected by regional economic uncertainty. It featured about 30 companies, down from about 50 registered retailers, said Winnie Gagan, the exhibiting manager for the fair. But the tough economic environment may be a boon for retailers selling items below the Dh100 mark. Nausheen Akhter, the owner of Naush, said sales of her store's fashion watches priced at about Dh70 had risen 30 per cent compared with the previous year.
Mr Grinberg said the boom years between 2002 and 2007 had passed, and retailers would now have to work harder to capture consumers. "Retailers will have to develop excellent products and strong marketing campaigns to reach them," he said. "Now, it is a more realistic and stable marketplace." @Email:aligaya@thenational.ae