Lost in the glitter was another equally brilliant tale; the one about how Arab investment companies are increasingly taking on well-known brands and helping them expand globally.
Tiffany for example, once benefited from the financial largesse of Bahrain’s Investcorp, which acquired the jeweller in 1984 and helped set it on a path to global expansion by opening its first store outside the United States, before selling in 1987. For a while, Investcorp was also a majority investor in luxury labels like Gucci (where they had the foresight to appoint Tom Ford), Chaumet and U.S. retailer Saks Fifth Avenue.
In a sense, none of this is remarkable. Foreign investors have been buying and selling other countries’ companies for years and even at its height, the Middle East’s foreign acquisitions have never quite equalled Japan’s Bubble-era appetite for everything American, a shopping spree that led to the resurrection of an only marginally less-noxious version of the racist ‘Yellow Peril’ fever that gripped Europe and America in the late 19th century.
Could this be about to change? It is possible, with Gulf coffers filling with oil revenues, although these days, domestic investment is far more important than it was during the 1980s and 90s when the region’s monarchies were busy spending the dividends of the 1970s oil boom.
So today, Qatar Luxury Group owns a 38 per cent stake in luxury bag-maker Anya Hindmarch, the Kuwaiti consortium of Investment Dar and Adeem Investment purchased Aston Martin in 2007, Bahrain’s Investcorp recently snapped up Danish luxury silverware and jeweller Georg Jensen. Qatar Holdings owns 25 per cent of Porsche, the first outsider to be permitted a stake. The McLaren Group is 50 per cent Bahraini, with Saudi investor Mansour Akram Ojjeh holding a further 21 per cent share through his holdings company, TAG and until two years ago, Mubadala Development owned 5 per cent of Ferrari - why else do you think Abu Dhabi has a Ferrari World?
What’s more interesting about this round of acquisitions though is less the purchases themselves, or indeed the sums they commanded – Aston Martin cost GBP 497 million (785 million USD), Georg Jensen USD 140 million and Anya Hindmarch GBP 27 million (43 million USD) - than the plans these brands’ new owners have for them.
Where once acquisitions were predicated as much on vanity and prestige as they were on the financial value of the transaction itself – Mohamed al-Fayed’s purchase of Harrods seems a good example of this, although the almost GBP 1 billion profit he made when he sold the store in 2010 to Qatar Holdings suggests that in some cases, vanity pays hefty dividends – later acquisitions were made more with an eye on the bottom line, with expansion in mind.
Hence Investcorp bought Georg Jensen, which currently has 94 stores worldwide, with the specific intention of expanding the brand’s reach in China, the world’s most voracious and voraciously-expanding luxury market. Similarly, Anya Hindmarch has also announced an aggressive expansion plan, with new outlets planned for the Middle East as well as Korea, Hong Kong, China and Japan.
In a world only now recovering from the crash of 2008, this marriage of Middle Eastern money, European luxury goods and Asian aspiration not only represents a novel new twist on the old Silk Road – with goods flowing West-East, this time – but should it flourish, could also be a sign that in our emerging multi-polar future, the global economy may be able to weather disruption without everything coming to a halt.
