A note from Karin & Liya
July's biggest stories sit at the intersection of trust, taste and infrastructure. Phia's affiliate controversy exposed weaknesses in startup governance, while OpenAI's Supply Co. drop raised a different question: can technology companies turn distribution power into cultural authority?
Across the GCC, the signals are more constructive: new fashion investment and manufacturing capacity in Saudi Arabia, stronger retail visibility for UAE brands, and new cross-market creative networks. This issue explores what these shifts mean for fashion, luxury and retail in the region.
Phia and the Weakness It Exposed in Venture Capital
Phia, the AI shopping app co-founded by Phoebe Gates and Sophia Kianni, came under scrutiny this month after a Bloomberg investigation alleged the browser extension was engaging in cookie stuffing by claiming affiliate commissions it hadn't earned. The investigation also reignited questions around browser permissions, data collection and how affiliate-powered shopping tools operate. What began as one of the year's highest-profile FashionTech launches quickly became a broader debate about transparency, trust and accountability in AI-powered commerce.
FashionTech Middle East take: Rather than dissecting the mechanics of the scandal, we explored the weakness it exposed in venture capital. Twice in under a year, Phia's most significant technical issues were uncovered not by investors, board members or formal diligence processes, but by independent outsiders. We argue that by Series A, technical and compliance reviews of the mechanism a business relies on to make money should be table stakes — not something left for competitors, researchers or journalists to discover after the cheque has cleared.
Read Liya's full article here
OpenAI launches clothing. Fashion wasn't impressed.
OpenAI expanded its Supply Co. platform with a public merchandise collection featuring slogan T-shirts, a "Research" quarter zip, accessories and lifestyle photography that looked more fashion campaign than company swag. The response from fashion media was swift, and largely sceptical. Critics questioned the originality of the designs and whether the collection borrowed too heavily from contemporary streetwear without offering a distinct creative point of view. Yet commercially, the launch told a different story. According to The Wall Street Journal, many pieces sold out shortly after release, demonstrating that demand for AI brands can outweigh fashion critics' opinions.
The bigger signal extends beyond the clothes themselves. As AI companies evolve into consumer brands, merchandise is becoming a way to build community, signal identity and create cultural relevance. But attention alone doesn't create fashion credibility. As more technology companies enter lifestyle categories, taste may become a strategic capability, not just a branding exercise.
ZYA Fund Moves From Launch to Growth-Stage Investment
Saudi Arabia's first fashion-dedicated private equity fund, ZYA, was announced back in April and is now moving into deployment. The SAR 300 million fund, established by Merak Capital and the Cultural Development Fund, will back growth-stage Saudi fashion and beauty businesses with credible paths to profitability.
Beyond capital, ZYA plans to provide strategic guidance, partnerships, mentorship and market access, while working with the Saudi Fashion Commission to strengthen fashion as an investable asset class.
Fynd brings AI-powered product creation to the GCC
Indian retail technology company Fynd, backed by Reliance Retail Ventures, launched Fynd Create across the GCC this month. The platform uses AI to support the entire product development workflow, from trend forecasting and design through sourcing, production and catalogue creation, helping brands bring collections to market faster. While much of fashion AI attention has focused on customer-facing experiences, Fynd's expansion highlights growing investment in AI for merchandising and supply chain operations.
In Focus: BoF Professional Masterclass: Face to Face With Luxury Clients
BoF's 21 July masterclass offered a useful briefing on changing luxury demand. Imran Amed and McKinsey senior partner Gemma D'Auria discussed the new BoF-McKinsey report, The State of Fashion: Face to Face With Luxury Clients.
The research focuses on luxury clients in the US and China, but its key signals are useful for GCC brands:
- Luxury should keep growing, but more slowly and unevenly, with forecast annual growth of about 4 to 6 per cent through 2030.
- Established and aspirational clients remain critical, representing roughly 70 to 90 per cent of the market.
- Desire is becoming more emotional and identity-led, with personal taste increasingly important.
- Exclusivity is shifting towards insider recognition, access and high-touch experiences.
- Stores remain the main source of inspiration, while AI is becoming a discovery tool for some clients.
What this means for the GCC: Human service and technology should work together. The strongest opportunity is to combine culturally informed clienteling, trusted advisors, memorable experiences and better data into one relationship system.
This month, we feature Nancy El Khatib, founder of UAE-based Scarlt.AI. The platform uses generative AI to help customers co-create, visualise and order made-to-measure garments.
Its challenge is practical: turning digital ideas into garments that can be produced, fitted, priced and delivered. This is especially relevant in the GCC, where couture, occasionwear and custom fashion remain commercially significant.
In the full Founder Spotlight, Nancy discusses her journey, the realities of building an AI-powered fashion platform and why the UAE could lead personalised fashion innovation.
Read the full Founder Spotlight here
A Love Story Hidden in an Acquisition
When Chanel acquired Charvet, it wasn't simply acquiring a manufacturer. It was investing in decades of craftsmanship, heritage and a relationship built over time.
Karin explores why this acquisition signals a broader shift in luxury. As aesthetics become easier to replicate, competitive advantage is increasingly found in authenticity, cultural heritage and long-standing relationships that cannot be manufactured overnight.
The article examines why heritage has become a strategic asset, what Chanel's reference to "a shared story" truly represents, and why culture often shapes investment decisions long before capital follows.
Read Karin's full article here
August is traditionally a quieter month across the fashion industry, with fewer major conferences and events on the calendar. It's the perfect time to step back, sharpen your knowledge, and invest in online courses, webinars, and virtual discussions before the industry picks up pace again in September.
- FAD Dubai: Building an AI-Powered Brand Workshop | 5 August 2026
Building an AI-Powered Brand Workshop explores how AI, branding and trend forecasting are reshaping the future of fashion. Led by Emilie Hill, participants will collaborate to develop and pitch a future-focused fashion brand while gaining practical insights into creative strategy, digital storytelling and AI-powered brand building.
- UAL - Fashion Design with AI Technology Online Short Course - Online
Fashion Design with AI Technology is an online short course that explores how AI is transforming the fashion design process from concept development to brand presentation. Led by industry expert Maggie Mattioni, participants will gain hands-on experience using AI tools to create fashion collections, develop brand identities, produce campaign assets, and build future-ready digital design workflows.
This month, we’re watching “AI Won’t Replace Designers, But It Will Change Their Role”, a session from the Fashion Tech Show Europe 2026 by PI Apparel, featuring Katharina Engelhardt.
The conversation moves beyond the familiar replacement debate and focuses on how AI is changing creative workflows. From reducing repetitive tasks to accelerating visualisation and improving communication between design and commercial teams, the session explores where technology can support creativity without taking control of it.
The key takeaway is simple: AI may change how designers work, but human judgement, authorship and taste remain the real differentiators.
Watch the full session here
Product Engineer
Aya | Riyadh: Aya is hiring a Product Engineer to build and optimise digital products that enhance user experience and business performance. The role involves collaborating with cross-functional teams to develop scalable product solutions and support innovation. Apply here.
Head of Innovation & AI
Apparel Group | Riyadh: Apparel Group is seeking a Head of Innovation & AI to lead the company's AI strategy and digital transformation initiatives. The role focuses on implementing emerging technologies to improve operations, customer experience and business growth. Apply here.
Consultant, Luxury Tech
Chalhoub Group | Riyadh: Chalhoub Group is looking for a Luxury Tech Consultant to help deliver technology-driven solutions for luxury retail clients. The role combines digital innovation, strategic consulting and technology implementation across the luxury sector. Apply here.
AI Project Coordinator (3-Month Contract)
Chalhoub Group | Dubai: Chalhoub Group is hiring an AI Project Coordinator to support the delivery of AI initiatives across the business. This contract role involves coordinating project timelines, stakeholders and implementation activities to ensure successful execution. Apply here.
Data Science Manager
Majid Al Futtaim | Dubai: Majid Al Futtaim is seeking a Data Science Manager to lead data-driven initiatives that support business strategy and customer insights. The role focuses on developing advanced analytics, machine learning solutions and high-performing data teams. Apply here.
Video Shopping Associate
The Luxury Closet | Dubai: The Luxury Closet is hiring a Video Shopping Associate to create engaging live and recorded shopping experiences for luxury customers. The role combines product presentation, customer engagement and digital commerce to drive online sales. Apply here.
Client Solutions Manager, Retail & Ecommerce (Turkish Speaking)
TikTok | Dubai: TikTok is looking for a Client Solutions Manager to support retail and e-commerce partners across Türkiye and South Asia. The role focuses on developing advertising strategies, managing client relationships and driving campaign performance on the platform. Apply here.
Closing Thoughts
We'll be taking a short break from our Coffee & FashionTech meetups over the summer and will return in September. In the meantime, if you attend an interesting conference, discover an emerging startup or have an insight worth sharing with the community, we'd love to hear from you.
Follow us on LinkedIn and Instagram to stay updated… and if you’re building something exciting in FashionTech, we’d love to hear from you.
Until next month,
Karin & Liya
Co-Founders, FashionTech Middle East
