MOSUL, Iraq (Reuters) - When Islamic State fighters came to Hamza Samih’s perfume shop in Mosul they issued two orders - get rid of the perfumes and colorful bras they said were unholy, and set up separate doors for men and women.

Residents shop at a market in the city of Mosul July 9, 2014. REUTERS/Stringer

Then the militants, Samih says, became his best customers.

“They were the ones with money. They bought perfumes for themselves and for their wives,” the 23-year-old storekeeper said of the Islamic State forces who were driven out of his street on Sunday by Iraqi special forces.

The militants overran Mosul two years ago, imposing their ultra-hardline interpretation of Sunni Islam over Iraq’s main northern city and policing everything from women’s clothing to the length of men’s beards.

They are now being driven out in the biggest military operation in Iraq since the 2003 U.S.-led invasion. Troops have pushed them out of around a quarter of the city in an advance now in its seventh week.

Samih says the militants’ draconian edicts almost put him out of business by forcing women, his main customers, to cover themselves in black, not use perfume in public and stay indoors.

“Daesh (Islamic State) banned most of my products. Makeup was forbidden, most perfumes for women and men, and this,” he said, pointing to a picture on his cell phone of a showcase full of green and blue bras he had to destroy.

Products with large logos in English were also banned. “Only small scribblings were tolerated,” Samih said, standing in front of the shut shop he runs with his family.

But while most of the population struggled to get by, residents say the militants enjoyed a privileged existence.

Some drove expensive cars and stayed in looted luxury villas, according to Samih’s neighbors and relatives - voicing a common refrain among residents in Mosul districts recaptured from Islamic State.

With Samih’s regular customers forced out, he became dependent for business on the militants, some of whom were acquiring high-end habits. “They went for the expensive foreign brands... Some had four wives,” he said.

He did not say how the militants distinguished between perfumes which were acceptable and those which were banned.

The army hopes people like Samih will reopen businesses quickly to bring life back to normal in recaptured areas of Mosul, a message delivered in person on Monday by the commander of the army’s counter terrorism unit, who came to Samih’s Aden district escorted by seven Humvees carrying masked gunners.

Surrounded by officers, Lieutenant-General Talib Shaghati walked form house to house, holding up a baby and promising an ululating woman that Islamic State will be defeated soon.

But in an indication of the shaky security, his guards took no chances when they later drove him a few blocks closer to the front, where the boom of the artillery guns could be heard.

Soldiers had set up street barricades with stones and trucks and put bulldozers on standby to prepare for suicide bombings.

Shaghati’s driver parked his Humvee next to a house where he briefly greeted soldiers before his escorts whisked him back into the jeep, pushing aside bystanders and driving him back to his base outside Mosul.

Back at the perfume shop, Samih said it was too soon to resume trading. “I’m not ready to open the shop yet. We need stability,” he said, looking exhausted.