Financial crisis vs Moscow Luxury
February 6, 2009 by edufashion
The financial crisis is sending a chill through Moscow’s once red-hot retail scene.
“We’ve noticed a 30 to 40 percent fall in sales,” said Irina Bytchkova, the manager of a Celine store being renovated.
Other firms say once-explosive growth has simply leveled off. “At the moment, there’s no decline in sales. We’re flat, there’s no movement up or down,” Alla Verber, vice president of prominent franchiser Mercury Distributor, said of the upscale Tsum department store, which Mercury also runs. She added: “We’re going to be less aggressive in spring-summer. We’ll decrease our orders by 20 percent.”
A Tom Ford store scheduled to open this year has been delayed, but Lisa Schiek, director of communications for the firm, said it was unconnected to the financial crisis. A Versace flagship also has been pushed back, though the company declined to comment on the reason.
Since late last year, Moscow has been a magnet for foreign firms. Stella McCartney, Alexander McQueen, Lanvin, Diane von Furstenberg, Emporio Armani and Boucheron, among others, as well as the homegrown Igor Chapurin and Alena Akhmadullina, have opened new stores here. Executives were in rapture over Russians’ love of luxury and exclusivity, and the expansion possibilities in a country that spans 11 time zones.
It’s not only boutiques in Moscow that depend on Russian luxury shoppers, however. Stores in London and Dubai, for example, can see heavy traffic from Russia-based consumers. For now, those tourist flows don’t appear to be disappearing. A Dubai Tourist Board spokesman in Moscow said he hadn’t noticed a significant decline in holidaymakers from Russia in the second half of this year. In the first part of the year, 165,000 Russians visited Dubai, up 7 percent over last year.
As the holiday season approaches in Moscow, firms will be looking to shoppers such as Marina Yudenich for an indicator of their fortunes in Russia. Every season, Yudenich, a wealthy television presenter and author, picks up around 10 designer items.
“The financial crisis hasn’t changed that,” she says. “People are buying what they bought before.”