i am emily.

From what I gather, the current unrest in the Middle East is being followed for three major reasons:

1) Concern about oil/safety/foreign relations (they’re all intertwined)
2) The growing power and role of social media (a little blue bird is toppling autocratic regimes)
3) When was the last time any of us (i.e. Americans) actually saw a revolution that wasn’t a re-enactment in a lower school gymnasium?

Based on those three reasons, there’s a lot of speculating about what happens next. Who will take control? When will the volatility settle? How long before there is actually reform? Will it get anymore violent?

Suzy Menkes raises her own “this is what will happen” point in an article from the IHT on February 26. If everything works out for the protestors, if regimes change and reforms are installed, one thing is certain: the middle class in the Middle East is going to grow. This has broad implications, in particular, for the luxury business.

Menkes quotes Michael Burke, chief executive of Fendi:

“This could be the best news since 1978, when China decided to go with the market economy,” said Mr. Burke, lamenting that in Egypt, a country of almost 83 million people, he does not have a single Fendi product on sale — even though its wealthy elite may have bought into luxury. “For every dictator, we could have one million customers. Traditionally, we do well when the many are integrated into society.”

Mr. Burke’s comments do not indicate that LVMH, Fendi’s parent company, is going to set-up boutiques in Libya anytime soon–the luxury industry is not about volatility and change and is, in general, not able to cope with it until the situation has died down. However, Mr. Burke’s observations about market economies and his blatant revenue chasing are telling.

The revolution(s) in the Middle East could go several ways. There is no certainty that progress will be made, especially in the short term. Even the countries that aren’t yet facing protests, let alone the ones that are, face other problems like rapidly growing populations and a standard of living that cannot keep pace. At the end of it all, however, these protests and revolutions are fundamentally about a skewed distribution of wealth. And, the moment that a little re-distribution starts to happen (even if that moment is years away), the middle class, also known as the driver of consumerism, is going to be front and center. And, if Menkes’ article is any indication about the mentality of the international business/retail industry, there are a lot of people poised to make money as soon as the average person in the Middle East starts earning a little more of their own.

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