On March 27, 2026, at 9:00 PM, CNBC reported that shares of global luxury goods companies have fallen sharply since the Iran-Iran conflict began. Analysts say sales in the Middle Eastern market, which is becoming increasingly important to the luxury industry, could drop by as much as half.
Shares of [brand name] have fallen approximately 16% and 20%, respectively, this month, while the S&P 500 index has dropped less than 6%. Ferrari shares have fallen 15%, and the company announced a temporary suspension of deliveries to the Middle East. Bentley, Maserati, and other luxury car manufacturers have also halted deliveries due to security risks and logistical issues.
Frank-Steffen Walliser, CEO of Bentley, told investors, "Production hasn't been affected yet, but certainly people in the Middle East aren't thinking about buying a new Bentley right now."
The Middle East: A New Market for Global Luxury Goods
For investors and luxury goods companies, the Iran-Iran conflict has highlighted the increasing importance of the Middle East to the global luxury industry and the billionaire economy. Although the region still accounts for a relatively small share of global sales, its market growth is significant.
Last year, the Middle East was the fastest-growing luxury goods market in the world, with growth of approximately 6–8%, while global luxury goods sales grew almost without growth. Currently, the Middle East accounts for about 6% of global luxury goods sales and may be roughly the same size as Japan, which accounts for about 9% of the global market.
Dubai in the United Arab Emirates is a key driver of growth, accounting for approximately 80% of growth in the UAE, and the UAE itself accounts for more than half of the region's luxury market growth.
The war erupted at a pivotal moment for the luxury industry.
The problems in the Middle East come at a critical time for the luxury goods industry. After two years of sluggish sales, companies are expecting a recovery in 2026. The Chinese market has begun to show a slight recovery after several years of declining sales. Luxury consumer spending in the US remains strong, driven by increased wealth from stocks and AI businesses. Europe remains stable, supported by tourism.
However, analysts from UBS state that investor sentiment towards luxury stocks is currently "the most negative in years," and geopolitical uncertainty could pressure company profits in the short term and delay the industry's recovery.
The drop in share prices has wiped out approximately $100,000 billion in market value from major luxury goods companies, with LVMH and Hermès losing more than $40,000 billion each.
If sales in the Middle East are halved, it will immediately impact the company's profits.
Analysts say that if sales in the Middle East halve in March, in a worst-case scenario, quarterly sales growth for many luxury goods companies could fall by around 1%.
However, the impact may not be very severe because, even though department stores and shops are quiet, many luxury companies are still selling directly to billionaire customers, such as through individual contact and home delivery. And wealthy customers who leave Dubai may simply purchase goods in other countries instead.
Analysts say that if the war only impacts the industry in March, the effect may not be very severe.
Dubai, the city of the world's billionaires, and...
Factors contributing to Dubai's growth, such as the absence of income tax, government stability, and its status as a tourist destination, remain unchanged. The number of millionaires in Dubai has doubled since 2557, exceeding 81,000, and by 2568, approximately 9,800 millionaires are projected to move to Dubai, bringing in a combined total of around $63,000 billion – the highest in the world. The majority of these millionaires come from the United Kingdom, China, India, and Europe.
However, Dubai's image as a safe city is beginning to waver, and the luxury goods market in the Middle East relies heavily on wealthy tourists, who may be avoided for a long time even after the ceasefire.
Morgan Stanley reports that approximately 60% of luxury goods spending in the UAE comes from tourists, and of those tourists, around 60% are from Russia, Saudi Arabia, China, and India.
High oil prices could impact the stock market and the spending habits of the wealthy.
Analysts also warn that higher oil prices could impact luxury goods sales, as mid-range aspirational luxury consumers may reduce spending due to rising living costs, while ultra-wealthy consumers might cut spending if the stock market is volatile.
Because the spending of the wealthy is dependent on the stock market, or the “wealth effect,” if the stock market declines or does not grow, spending on luxury goods may decrease as well.
Analysts concluded, "If oil prices rise to the point that global stock markets fall, that would be very bad news, because wealthy individuals' confidence in the stock market would decrease, and they would spend less."
