Sick of hearing about Libya every second of the day? You wouldn’t be the only one. After watching the minute-by-minute play of the uprising in Libya and the apparent ousting of dictator Muammar Gaddafi, the logical question is, what’s next? How does a rather large country in Africa, surrounded by smaller, less significant countries capitalize on the high expectations of its people and hopes for a new, better life under a new democratic government? The answer is that although there really isn’t a clear path to success, a major factor will be financial stability. With the UN approving the release of the Libya’s global investment of $1.5 billion earlier today (frozen during the uprising), the country’s new government is rushing to set up the necessary infrastructure to meet the immediate and long-over due needs of the Libyian people.
Unlike the U.S., money shouldn’t be an overwhelming issue for Libya. It’s global worth is estimated at $100 billion and even if a portion of these funds is not accessible given Gaddafi’s preference for hard to trace, offshore accounting, the country would be very well positioned if it could find a way to quickly return to producing the 1.6 million barrels of oil daily as it before the internal conflict began months ago. Libya is sitting on the precipice of becoming an exemplary case of how revolt against the status quo can lead to a new-found security and prosperity. This potential is even more obvious given its small population of 6.4 million, a characteristic it shares with six of the ten richest countries in the world according to a 2010 study.
Much like oil rich Middle Eastern countries including Qatar and UAE, Libya is sitting on a gold mine. If the new government is properly and ethically managed, there is a real possibility that this newly freed country could easily represent the next emerging market for luxury goods. We can all thank Sarah Jessica Parker’s alter ego Carrie Bradshaw and her gal pals in Sex & the City 2 (still upset about never getting back those two wasted hours) for depicting just how valuable young, modern Arab women with immense disposable income are to luxury labels. Patrick Chaloub, president of Chalhoub Group, who has retail joint ventures with Louis Vuitton, Christian Dior and Christian Louboutin throughout the Middle East, cites a recent retail report from CB Richard Ellis showing 85% of luxury retailers are present in Dubai, a market that is expected to grow five to eight percent in 2011, almost double that of the worldwide luxury market. Although the luxury consumers good market has had unique success in rebounding back to pre-recession revenue levels, brands will continue to search for new revenue streams and a suddenly open, stable and wealthy marketplace such as Libya might be too attractive to not pursue in search of the ‘next Dubai’. All you need is an industry leader to make the first move.
Enter François-Henri Pinault (aka Mr. Salma Hayek), CEO of PPR, a leader in the luxury and lifestyle markets with a portfolio of highly recognized international brands focusing on apparel and accessories. Owning luxury brands such as Gucci, Balenciaga, YSL and Alexander McQueen, Pinault is known for aggressively searching out new opportunities and relying on innovation and change to drive growth. Call me crazy, but Libya isn’t too far off from potentially fitting the bill. Overthrowing a dictator, creating a new democratic government and restarting an extremely profitable economy based on oil production, may be what needs to occur in order to shift Libya from this:
Yes, I know. I won’t be winning any awards for my photoshop skills, but I think you get the picture (pun intended) of what type of transformation a new Libya could mean not only for the democratic freedom of its people, but the luxury retail landscape.