The conflict in the Gulf is hitting designer handbags and luxury watches. The Gulf war shakes up 400 billion world fashion industry as sales crash across Dubai and Abu Dhabi. Reuters reported that Europe’s biggest luxury brands saw sharp declines in March at the Mall of the Emirates. Sales fell 30 to 50 percent compared to the same month last year.

Louis Vuitton, Dior, Gucci, Cartier, Chanel, and Rolex all reported a 15 percent drop in the region. At the larger Dubai Mall, which relies more on tourist spending, traffic fell by around 50 percent. That suggests an even deeper drop in sales. The Galleria Al Maryah Island in Abu Dhabi reported a 10 percent decline.

The Middle East had been one of the few bright spots for the global luxury industry. But the Gulf war shakes up 400 billion world fashion industry at a vulnerable time. The sector already saw industry wide sales fall 2 percent last year. Now this conflict adds another major setback.

Even if diplomatic efforts succeed, recovery could take months. The region accounts for roughly 5 percent of global luxury consumption. But it remains one of the most profitable retail markets for high end brands. Low taxes, strong tourist inflows, and high per square metre sales made the Gulf a goldmine.