Dubai: The Chalhoub Group will close at least 15 stores in the UAE this year and focus more on enhancing services in its existing stores amid a softening luxury retail sector, according to its top executive.

The Dubai-based group is the franchise partner for luxury brands including Louis Vuitton, Christian Dior and Fendi in the Middle East, and has over 650 outlets in 14 countries.

It expects to close between 15 and 20 stores in the country, including in Dubai, Abu Dhabi and Sharjah, and 40 in the Middle East this year, Patrick M. Chalhoub, chief executive of the Chalhoub Group, said on the sidelines of the World Retail Congress, which kicked off in Dubai on Tuesday.

“This year, we will close a little bit more stores because some that we have assessed are not in a pertinent situation anymore,” he said, adding that while the company will close some stores, it plans to open around 30 in the country this year.

The Chalhoub Group will also “explore new concepts and new ways of marketing things” in the current year, he said.

The company plans to open a new children’s department store at Dubai’s City Walk on Saturday that will feature 200 brands. Covering 10,000 square metres, Level Kids will offer luxury ready-to-wear items from brands including Armani and Gucci, Chalhoub said.

“We just need to make sure that we are adapting to this new dynamic of the market. We are in an interesting moment where we have challenges. We need to make sure that what we have done in the past, we do it differently in the future,” he said.

The growth of the luxury retail market in the UAE has slowed down over the last year due to lower consumer spending on big-ticket items. The drop in the value of some currencies, such as the euro and Russian rouble, against the US dollar, which the UAE dirham is pegged to, has made it expensive for some travellers to shop in the country.

“The luxury goods market in the UAE is expected to grow at a slower pace. Compared to 2015, which experienced a growth of 6 per cent, we expect a growth of 5 per cent in 2016,” said Amna Abbas, research analyst at consultancy Euromonitor International. The luxury goods market in the country is expected to be valued at Dh17.8 billion this year, according to the consultancy.

Chalhoub expects the company’s sales to grow marginally this year in the UAE — by around 3-4 per cent compared to 2015, after posting flat sales year-on-year in the first quarter of 2016.

“In the beginning of last year, we had a lot of Saudi visitors, who had more wages, and more Russian and Chinese customers. But after the first quarter of last year, we haven’t seen them. So the situation has changed between the first quarter of last year and the first quarter of this year. For the rest of last year, it wasn’t better,” Chalhoub said.

He said that Russian customers, who tend to spend a lot on luxury items, are “disappearing by the day”, while Chinese middle-class customers are less interested in luxury products. “We had more of them but they bought less than last year,” he said.