Economy, Domestic Economy
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Beauty Brands Eye Up Iran’s Top Spenders

Beauty Brands Eye Up Iran’s Top SpendersBeauty Brands Eye Up Iran’s Top Spenders

When Dubai businesswoman Negin Fattahi-Dasmal opened the first branch of her luxurious nail salon chain in Iran this year, it was met with both excitement and skepticism.

Cosmetics sales in Iran are among the highest in the Middle East.

With most international economic sanctions now lifted after a nuclear agreement with world powers that took effect this year, Fattahi-Dasmal thinks it is time to bring in a high-end international brand.

Her chain of nail salons, N.Bar, already has a customer base among the thousands of well-off young Iranians who holiday in nearby Dubai.

“For Iranian women, it’s a sought-after brand,” Fattahi-Dasmal, an Iranian-born Emirati, said in an interview, adding that there have been a lot of counterfeit products in Iran.

Nonetheless, she said some customers were skeptical that the new Tehran branch could replicate the quality and consistency customers are used to in Dubai, where branches offer dozens of standardized treatments and stringent hygiene procedures.

  High Fashion

Iran’s fashion-forward twenty-somethings have kept up with global trends. Fattahi-Dasmal says they are discerning consumers.

Even under sanctions, independent shops in the affluent northern districts of Tehran managed to obtain the latest seasonal collections of top global brands such as Dolce & Gabbana, Louis Vuitton, Gucci and Roberto Cavalli.

Some of those luxury fashion brands are now entering Iran directly, and there could be similar opportunities for beauty and cosmetics—a market estimated by Iran’s Majlis Research Center to be worth more than $4 billion a year.

  FRANCHISE IT

Complex business and banking regulations are a potential obstacle that lead many, including Fattahi-Dasmal, to opt for a franchise arrangement, licensing to a local partner rather than owning her Tehran shop herself. An expensive and badly-regulated rental market adds to the difficulties.

“Because of the legalities and complications, Iran is not an easy place to do business but it is also very lucrative. That was the reason we franchised,” Fattahi-Dasmal said.

Some brands have been held up by the difficulty of finding a partner who is a good fit for their business.

“Iran has potential but we are still at the stage of finding the right partner,” said Jean Cassegrain, chief executive of handbag maker Longchamp, adding that the process could take considerable time.

But Fattahi-Dasmal is not deterred, and is even considering exporting another of her brands to Iran.

JetSet, an aviation-themed hair salon chain, could soon land in Tehran.

“Why not?” she said.

Financialtribune.com