The turmoil and instability of several major international luxury brands, Iran is garnering attention for the potential Bulgari is intending to open shortly in Tehran, the country’s capital, which, according to CEO Jean-Christophe Babin, “represents the next big market in the Middle East.” In 2015, Montblanc’s CEO, Jérôme Lambert, announced that the brand was also seeking partners in Iran. Longines has also expressed a keen interest to open in Tehran.
The country has a large young generation which is avid for luxury goods and wants to distance itself from the austerity of the ruling regime. Contrary to the clichés, sports cars and luxury watches can be seen on Tehran’s streets. It’s worth remembering that the first Tehran Fashion Week took place in 2015. And according to the International Monetary Fund, its GDP per inhabitant is higher than in China, India or Brazil, at 16,500 dollars.
“Officially, it’s an open market with reasonable customs duties and VAT,” confirms Maurice Altermatt, head of the Swiss horology federation (FH). “So on paper, everything is possible. The main problem resides in the long, complicated financial transactions. The Iranian banking system is still subject to US sanctions.” Consequently, transactions still have to be made very largely through intermediary countries, such as Turkey or the United Arab Emirates But one obstacle has already been overcome: Swiss Export Risk Insurance (SERV) is again allowed to cover short, medium and longterm financing operations to Iran.
When interviewed in 2015 by Swissinfo, Sharif Nezam-Mafi, the president of the Iran-Switzerland Chamber of Commerce, described Iran as “ready to join the international community,” while issuing a warning of the “incredible level” of corruption and nepotism, not to mention the all-pervading bureaucracy. Moreover, huge inequalities are found in the country, with a small proportion of ultra-rich and a middle class which is struggling to develop, undermined by the decline in oil revenues. “Rome wasn’t built in a day: the economy, which is over-dependent on oil, needs to diversify. The growth of the watch market will also depend on the geopolitical context, depending on whether or not the nuclear agreement is respected.”