Should we celebrate the openings of Harvey Nichols and Saks Fifth Avenue in Turkey?
Turkey has enjoyed an extraordinary period of economic stability, raising per capita income from US$2,146 in 2001 to above US$5,000 this year. Even so, the level of purchasing power of an average Turk is still less than one-third of the European level. This is why it is a curious development to see the giants of luxury retailing, like Harvey Nichols and Saks Fifth Avenue, opening stores in Turkey. These department stores for the super-rich rarely invest outside of their homelands, building franchises only in the Gulf region and Hong Kong. So why are they interested in the Turkish market when there are so many countries with higher purchasing power? The answer is not hidden in demographics or national accounts. We need to look beyond averages and aggregates to see the reality attracting luxury brands. Turkey’s per capita income may be a mere 31% of what an ordinary European takes home in a year, but there is a sub-group of the population that is as rich as the richest of rich countries.
