The Middle East war has hurt the sales of some of the world’s largest luxury groups, while also denting the sales at air hubs in the region, financial data shows.

From Hermes to Gucci and duty-free stores, the impact of conflict is seen on the sheets of the sector, which has already been facing a slower demand in recent quarters.

French luxury group Hermes reported weaker-than-expected first-quarter sales on Wednesday as the Iran war hit spending in the Middle East as well ⁠as in France, with fewer ⁠tourists visiting Paris and buying designer items.

Sales of products including Birkin and Kelly bags, silk scarves and perfume rose by ​5.6% in currency-adjusted terms, but lower than a Visible Alpha ​analyst ⁠consensus of 7.1% growth.

Currency fluctuations took 290 million euros ($342 million) off Hermes’ revenue, leading to a 1% drop in reported sales to 4.07 billion euros, from 4.13 billion euros a year ago.

Hermes, which caters to the ultra-wealthy with handbags starting at $13,000, said weaker tourist flows had hit sales in concession stores at airports and in the Middle East, as well as in France, Britain, Italy and Switzerland, where Gulf shoppers are a key driver.

Investors’ hopes for luxury demand to recover ⁠this ⁠year have been dashed by the Iran war, which has dented Dubai mall sales and sent energy prices soaring, hitting consumer confidence.

Gucci sales also down

Similarly, sales at Kering’s Italian flagship brand Gucci ⁠dropped by 8% in the first quarter from ⁠the previous year, the fashion group said on Tuesday, with the decline also tied to the curtailed shopping due to the conflict in the Middle East and disruptions in international travel.

Gucci’s 1.35 billion euro sales from January to ​March were slightly below analyst forecasts, with the drop marking the 11th ​straight ⁠quarterly decline.

A Visible Alpha analyst consensus for revenues had projected around 1.37 billion euros.

The result, days before Kering CEO Luca de Meo is due to unveil his strategic plan to turn around the group’s fortunes, serves as a reminder of the steep challenge ahead for the storied fashion house and its controlling shareholder, the French Pinault family. Kering called the quarterly outcome a “first step” in its recovery.

Investors are pinning hopes on de Meo’s ability to find a recipe for success amid a jittery market and rapidly shifting trends, though most analysts expect Gucci to only return to growth in the second half of the year.

Still, Kering’s shares are down about 8% this year.

Impact seen at duty-free stores

From DFS ​to Avolta, duty-free stores selling premium perfumes and spirits to big spenders are also feeling the pinch as conflict in the Middle East shuts airports and curbs travel to the ⁠region – a setback likely to become more acute if ⁠the war drags on.

The disruption, now in its sixth week, exposes a vulnerability for luxury and beauty groups that have relied on airport shopping and Gulf hubs – among their highest-margin channels – to offset weaker demand ​in China and Europe, making even short-term airport closure a potential drag on ​quarterly ⁠profit.

Analysts have said a prolonged slump in Middle East air traffic could compound pressure on a travel-retail industry still recovering from the COVID-19 pandemic, squeezing underperforming businesses such as LVMH’s DFS and weighing on prestige beauty and luxury firms including Estee Lauder, Puig and L’Oreal.

International flights to and from the Middle East plummeted in the first half of March. While some airlines in the United Arab Emirates are slowly restarting, flights remain well below normal levels.

Flight cancellations from the Middle East, excluding Türkiye, decreased from their peak of 65% on March 3 to 13% on March 27, according to data from Cirium, but the number of flights scheduled has also fallen.

DFS “is costing two (percentage) points of growth” for its selective retailing division, which includes beauty brand Sephora, LVMH Chief Financial Officer Cecile Cabanis told analysts this week.

The conflict shaved at least 1% off ⁠group ⁠sales in the latest quarter due to lower spending in the Gulf region, LVMH said.

“What we see today is still that demand is very much down,” Cabanis said.

Gulf hubs suffer

Companies that operate in the $74 billion travel-retail industry have been shifting inventories and temporarily closing airport stores in the region. Normalcy for luxury airport shops may take time, analysts said.

Dubai International Airport, whose retail outlets include L’Oreal’s Aesop, Kering’s Gucci and Estee’s Jo Malone, is operating a reduced number of terminals after a drone attack forced the hub to temporarily close.

Kuwait International Airport has been shut due to repeated drone strikes, halting sales for airport outlets owned by Avolta and Boots.

Avolta, which earns ⁠3% of revenue from the Middle East, is moving inventory from locations with slower sales to those with more foot traffic, CFO Yves Gerster told Reuters. Still, partly shuttered airports in some instances were leading to strong sales of food and other items for stranded travelers, for instance, ​at Dubai airport, Gerster said.

Kering CFO Armelle Poulou told Reuters after the company’s first-quarter earnings report that travel retail ​was slightly down compared with last year, and that “performance with local customers has been more resilient than tourism-related demand.”

The conflict shaved 3% off overall Kering sales in March, or 1% for the quarter, with a similar ⁠effect at Gucci ‌in particular, Poulou ‌said.

Investors will keenly watch out for Estee’s quarterly results on May 1, as the ⁠firm explores a $40 billion acquisition of Spanish competitor Puig, which derives ‌a tenth of sales from travel retail. That makes it one of the more exposed beauty companies to swings in airport shopping and international travel, analysts ​said.

L’Oreal, whose travel-retail business in Asia accounted ⁠for less than 4% of the company’s $44 billion in 2025 sales, is scheduled to report ⁠quarterly results on April 22. The company does not provide total travel-retail sales, although analysts said Asia accounts for the ⁠largest share.

Estee Lauder and ​L’Oreal declined to comment to Reuters. Puig was not immediately available for comment.

As global demand for gold surges, a critical constraint is emerging in the background, one that could reshape financial power. The Vice Chairman of Ahlatcı Holding, Ahmet Emin Ahlatcı, warned that the number of refineries capable of meeting sovereign standards is shrinking even as central bank demand accelerates, a report said Tuesday.

The report by Forbes said growing demand for gold is colliding with a shrinking number of facilities able to refine it to the standards required by central banks and sovereign buyers.

Gold prices have risen sharply in recent years, increasing from about $2,039 per ounce in early 2024 to nearly $4,850 by April 2026, driven by geopolitical tensions, inflation concerns and strong central bank demand, the report said.

Ahlatcı said refineries that meet strict compliance and traceability requirements are becoming fewer.

“The number of refineries that can meet sovereign-grade compliance and traceability standards is shrinking, not growing,” he said, adding that central banks are becoming more selective about the gold they accept.

The report said this mismatch between rising demand and limited refining capacity is increasing the importance of refineries and certification institutions in global markets, as they determine whether gold can be accepted into official reserves.

According to the report, the trend is also linked to broader geopolitical developments, including competition between China and the United States.

China has been increasing its gold reserves as part of efforts to reduce reliance on the U.S. dollar, while maintaining its export-driven economic model, the report said.

Gold is being used as a neutral store of value by countries seeking to diversify reserves without shifting fully to another currency, it added.

The report said control over refining capacity could become more significant in the future, as countries expand efforts to secure access to gold and influence how it is processed and traded globally.

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At the training center of Indian startup Pronto, women sharpen their cleaning and kitchen skills while also learning how to send out an SOS if they ever feel unsafe while working in clients’ houses. They’re preparing to join India’s latest trend – providing household help for just $1 per hour.

Indu Jaiswar, 35, hopes doing household chores in her first job can help fund her son’s dream of becoming a doctor. “This is what we’ve been doing in our ⁠own homes for years. Might as well get paid for it,” said the mother ⁠of two.

In a country with an entrenched culture of outsourcing household work, Indian startups Pronto and Snabbit, and listed rival Urban Company are training thousands of domestic helpers.

Urban Company estimates India’s rapidly growing cleaning services market is worth an estimated $9 billion and spread across 53 million households.

Like Uber drivers, the helpers receive bookings on their apps, directing them ​to apartments in assigned neighborhoods within minutes, and press a countdown timer in their apps before starting work. The potential annual earnings ​from ⁠working eight hours a day can be as high as $5,000 – a figure that far surpasses India’s per capita income of around $3,000.

The companies are betting big, burning millions of dollars to lure busy professionals in cities like New Delhi and Mumbai with under-99-rupee ($1) offerings that have no global parallel. Similar services can cost around $30 an hour in the United States, and around $7 in China.

However, the craze among consumers and workers is tempered by concerns about women’s safety in a country with high rates of sexual harassment. Unlike e-commerce couriers who spend just brief moments at doorsteps, housekeepers may spend hours inside private homes, exposing them to greater risks.

Soumya Chauhan, a principal at Dutch e-commerce investor Prosus, which has a stake in Urban Company, said she views worker safety as the fundamental operational challenge to solve.

“The platforms that successfully crack the safety protocols will earn the deepest consumer loyalty and the most sustainable market returns,” she said.

Safety risks

Cognisant of the challenges for a business that mainly employs women, Snabbit and Pronto said they have an in-app SOS button that alerts area supervisors in case of distress, while Pronto also offers self-defense training.

“In the offline world, the rate of abuse for a lot of these domestic workers is super high,” said Pronto’s 23-year-old CEO Anjali Sardana, adding that her company is trying to comfort its workers by assuring legal ⁠and medical ⁠support when needed.

Urban Company, which also offers services like plumbing, declined to comment for this story. It has previously said it offers a women-only safety helpline and an SOS app feature.

Shabnam Hashmi, a women’s rights activist, said the companies run extensive background checks on workers before onboarding them, but should also check customer credentials. Currently, users can simply log in to apps to book home help.

“How is it ever possible for these jobs to be safe for women – even with an SOS button? Unless they carry cameras, which is of course impossible, there is no way to know what happens behind that door,” she said.

Pronto worker Jaiswar has found her own workaround: she always calls a customer before visiting a home and goes “only if there’s a woman present.”

Rapid expansion

The companies, meanwhile, are getting record orders.

Urban Company recorded its highest daily home services bookings of 50,000 in February. Snabbit’s have grown to 35,000 orders a day.

Bain Capital-backed Pronto logged a record 22,000 daily bookings in March, up from 2,500 daily orders in October, and raised $25 million in new funding.

Pronto CEO Sardana said she started the ⁠business last year after spotting an opportunity to serve three sides: strong demand from customers for reliable maids, workers’ need for more stable and safer jobs, and a gap in the market for a scalable service.

“It’s possible to build a win-win-win business,” she told Reuters.

Fuelling the trend is also India’s lack of a do-it-yourself culture, and Indians’ love for getting things done cheaply.

In Bengaluru, 30-year-old Dhruv, who uses only a first name, said he spent 100 rupees ($1) ​per hour for Urban Company’s service to help unpack his utensils and hang curtains after moving house.

That helped him “save quite a bit of time and effort,” but the price does matter: “I wouldn’t pay ​400 or 500 rupees for it.”

Snabbit founder Aayush Agarwal said his service was becoming popular among young couples and singles who want to schedule housekeepers and not hire monthly domestic helpers who are infamous for skipping work.

Pronto is offering some visits for 25 rupees in Facebook ads with taglines like “Maid on Leave? Don’t grieve,” while an Urban Company three-visit pack ⁠costs 66 rupees an ‌hour.

Snabbit ads said a ‌customer booked a helper “just to peel 20 potatoes,” while another had lined up a worker to “separate LEGO blocks by color.”

The cash burn

Like ⁠many startups in their growth phase, the companies are paying their workers out-of-pocket to make the jobs attractive, but also ‌doling out hefty discounts to reel in customers.

In October to December, Urban Company disclosures show it received 1.61 million home-help orders, each incurring a loss of 381 rupees ($4). The company says its “discounts are moderating,” but its order values need to ​almost double to break even.

“Over a period of time, it ⁠is safe to say that it will become an earn-as-you-go model,” said Rahul Taneja, partner at Lightspeed, which has backed Snabbit.

At the Pronto center, ⁠where workers get a uniform and are trained to wear polished shoes, posters revealed potential payouts: home helpers can earn $1.60 per hour for 12 hours of work daily in a month, 48% ⁠more than what a new customer pays.

At ​more than $500 a month, that’s a big allure for Nisha Chandaliya, 22, who needs to support her ailing mother and has quit a call-center job that stretched long hours and paid only $180 a month.

“It’s exhausting to clean six to seven homes, but I need the stability. I can’t afford to go back,” she said.

The European Union reached a preliminary deal on Monday to nearly halve imports of steel and ​impose tariffs of 50% on excess ​shipments ⁠to protect the bloc’s steel industry from overproduction elsewhere.

EU steel producers are operating at only 65% capacity due to rising imports and 50% tariffs imposed by U.S. President Donald Trump. The new measures are designed to push capacity utilization up to 80%.

Representatives for the European Parliament and the Council, the body representing EU governments, agreed late on Monday to limit tariff-free imports to 18.3 million metric tons per ⁠year, a ⁠47% cut compared to 2024, with a doubling of the out-of-quota duties.

Last year, the main sources of steel imports into the EU were Türkiye, South Korea, Indonesia, China, India, Ukraine, and Taiwan.

EU steel is currently protected by safeguards, put in place during Trump’s first term, with import quotas and 25% tariffs above those limits. However, under World ⁠Trade Organization (WTO) rules, they must expire after eight years – on June 30.

The European Commission, which proposed new measures in October, said the EU ​steel sector has lost some 100,000 jobs since 2008 and output ​would decline even further without extended restrictions.

The new measures will take more into account where imported steel was ⁠originally ‌melted ‌and poured to avoid circumvention and be regularly ⁠reviewed to ensure they are ‌effective.

The parties also committed to phase-out imports of steel from Russia swiftly, ​possibly by September 2028. ⁠Some 3.7 million tons of steel slabs ⁠came from Russia to the EU last year.

The parliament and ⁠Council will need ​to vote on Monday’s agreement for the measures to enter force.

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International real estate investors are seeking alternative routes for “risk diversification” and to “create a Plan B” in the wake of the conflict between the U.S.-Israel and Iran, with Türkiye standing out among these options, according to a report on Tuesday.

It has now been around one-and-a-half months since the conflict erupted, turning into a regional tension following U.S. and Israeli attacks on Iran and Tehran’s retaliations.

Dubai – ranking high among the locations where Turkish citizens purchase the most property – continues to be negatively affected by the Middle East crisis. Accordingly, the spread of attacks between the U.S., Israel and Iran to other regional countries has led to a drop in property sales in Dubai, which had become a focal point for international investors.

According to the digital platform DXB Interact, which provides data on the real estate market in Dubai, property sales dropped from 17,027 units (between Feb. 2 and March 1) to 11,828 in the four weeks after the conflict began (March 2-29). Thus, the initial decline in sales of 25% rose to 30.5% over the course of a month.

The transaction volume also dropped by 36% in one month, falling from $16.53 billion to $10.58 billion, according to the report by Anadolu Agency (AA), citing platform data.

Moreover, industry representatives suggest that international real estate investors are seeking alternative routes for “risk diversification” and “Plan B” because of the war.

Decline in prices

International real estate expert and CEO of Level Immigration and Properties, Haitham Ahmet Alamarioğlu, said they expect the decline in property sales in Dubai to continue in the short and medium term. He stated that without a permanent cease-fire, international investors would remain in a wait-and-see position.

“Without a permanent cease-fire, trust will not return, and transaction volumes will not recover without trust,” Alamarioğlu said.

“In such scenarios, having a Plan B shifts from precaution to necessity. Historically, it has taken at least 12-18 months for geo-politically triggered corrections in Dubai to reverse. This time, it might take even longer,” he added.

Additionally, Alamarioğlu stated that early data indicate a 4%-5% drop in prices, adding, however, that the main pressure “hasn’t been fully felt yet.”

“When transaction volumes fall, prices react with a delay. Sellers first resist lowering prices, the market freezes, then the correction comes. A more pronounced correction in the next quarter is highly likely.”

3 main alternative routes

Still, Alamarioğlu remarked that Dubai’s story isn’t over, but argued that its “safe haven” narrative took a significant hit.

“Dubai partially lost its appeal. There’s no sudden exodus, but a gradual rebalancing. Investors are now asking, ‘If I need to exit this market tomorrow, what’s my Plan B if I can’t quickly sell my property and my capital gets stuck here for my family?'”

He went on to say that Türkiye, Greece and Panama are standing out as three alternative destinations for international property investors.

He noted a significant increase in demand from Iranian and Gulf-based buyers in Türkiye, which he tied to its “citizenship by investment” program.

“This is driven by visa-free entry, cultural proximity, and it being one of the rare accessible ways to obtain full citizenship through property acquisition,” he noted.

He also mentioned the Golden Visa program in Greece, as well as the “qualified investor program” in Panama, which grants permanent residence in 30 days.

Özden Çimen, international real estate expert and CEO of Parcel Estates, also stated that recent developments in the Middle East have put investors in a “wait-and-see” mode, and there hasn’t been panic selling yet.

Çimen said that Dubai’s zero income tax, high rental yields, secure regulatory environment, and high liquidity still attract investor interest. She also mentioned the recent rise in the Dubai Financial Market Real Estate Index, which tracks real estate company shares, after the cease-fire talks.

Çimen conveyed that Dubai hasn’t lost its allure, but suggested that international investors are diversifying geographically.

“Recently, investors have been considering locations like London, Lisbon, Istanbul, Miami and Barcelona as additional portfolio destinations. We can view this as a risk diversification strategy.”

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Disinflation in Türkiye continues across all subgroups, albeit at varying speeds, the central bank’s chief said on Monday, according to the text of a presentation made in New York.

Annual inflation declined to 30.9% in March despite the pricing pressures from the fallout of the Iran war. Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan said underlying trend of inflation also eased last month.

In the presentation to investors in the U.S., Karahan said the disinflation process was supported by a reduced rigidity in rent and education prices, an effect he said was expected to continue throughout the year.

The U.S.-Israeli war on Iran has damaged Gulf energy production, stranded tanker traffic in the key Strait of Hormuz and boosted oil prices in the world’s worst energy shock.

That came as a major test for countries that import most of their energy needs, including Türkiye.

Turkish authorities have taken steps to cushion the fallout of the war on domestic markets. Officials said they were prepared for more steps if the two-week cease-fire, announced last week, does not ​hold.

The CBRT has already halted its easing cycle at 37%, lifted its overnight rate by ​about 300 basis points to near 40% and announced steps to support liquidity in the domestic markets.

Bankers on Monday estimated that the central bank bought $13 billion in foreign exchange last week in a reversal since the Iran war began, and total reserves rose by some $9 billion to $171 billion.

Net reserves are estimated to have increased by $10 billion last week to $55 billion, bankers said, citing calculations based on data.

Karahan said declining gold prices have contributed to easing household demand for foreign currency, while international reserves are currently stronger compared to previous periods of capital outflows.

Meanwhile, Turkish authorities last month reintroduced a system that adjusts the special consumption ​tax (ÖTV) on fuel products and prevents higher oil prices from being fully passed through to consumers.

Karahan said the mechanism, called the “sliding-scale” system, has helped limit inflationary pressures.

The presentation also showed that the governor said demand indicators pointed to a slowdown in Türkiye’s economic activity.

Capacity utilization remains weak, he said, and demand-side indicators suggest moderating growth. Survey-based data also confirm the slowdown, while credit growth decelerated in the first quarter.

On external balances, Karahan stated that the current account deficit, shaped largely by energy imports and tourism revenues, remains below historical averages.

Official data on Monday showed Türkiye’s current account balance registered a deficit of $7.5 billion in February, in line with market expectations.

The figure lifted the January-February deficit to $14.54 billion.

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