Premium fashion houses have updated sales records in Russia

Last year brought record revenues to luxury goods manufacturers in RUSSIA. it will not be possible to repeat this success in the near future:

In 2021, local dealers of global luxury brands grew their revenue at a double-digit pace, posting the highest sales in five years. This follows from the RAS reporting of legal entities of eight international companies that are in the top 30 of the world ranking of the largest luxury sellers according to Deloitte and at the same time operate independently in Russia.

The leader in terms of increase in sales revenue in absolute terms — by 6.4 billion rubles. - became Chanel LLC, the "daughter" of Chanel. A year earlier, the fashion house reduced its revenue by 8.4%. In relative terms, last year Bulgari Russia LLC, a subsidiary of the Italian Bvlgari (owned by the French LVMH group), demonstrated the highest sales dynamics - its revenue grew almost 2.5 times year-on-year, to 4 billion rubles.

In open sources, there are still no financial results under RAS of the local legal entity of the Burberry fashion house, which also operates independently in Russia.

The owners of Louis Vuitton and Chanel will temporarily close stores in Russia Business

The luxury market recovered last year after falling in the pandemic 2020, and by the end of 2021, the Russian segment of premium clothing, footwear and accessories reached 320 billion rubles, the INFOLine-Analytics agency estimates.

In the first days of March, companies in the premium sector gradually announced the suspension of work in Russia. The owners of the largest fashion houses, the LVMH group, closed their stores (in addition to Bvlgari, these are also the brands Louis Vuitton, Dior, Fendi, Loro Piana, Berluti, Christian Dior, etc.), Chanel, Prada, Hugo Boss, Kering (Gucci, Bottega Veneta, Alexander McQueen , Saint Laurent and others), the Swiss watch house Richemont. LVMH-owned Tiffany brand not only stopped retail sales, but also refused to purchase diamonds mined in Russia.

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Leaving Russia was not painless for fashion houses. For example, the Italian luxury menswear label Ermenegildo Zegna has not only suspended deliveries to its franchisees and distributors in Russia for an indefinite period, but also the production of the Fall/Winter 2022 collection for the local market. In its reporting, the manufacturer indicated that it had already purchased materials for the production of this collection, and feared that it might not be able to use the surplus materials. In addition, the management of Ermenegildo Zegna doubted that they would be able to receive funds from the sale of the Spring/Summer 2022 collection from their Russian partners, specifying, however, that these amounts are insignificant.

EXPORT of luxury goods from Europe and the usa is prohibited. What is important to know Business

Many of the companies outpaced country-wide trade sanctions against Russia. In mid-March, the export of luxury goods was banned from the US and EU countries, later joined by Switzerland and Japan. The EU embargo applies to luxury goods that cost more than €300 apiece, the US - in particular, to perfumes, clothes and shoes, which cost more than $1,000 in wholesale.

These restrictions mean that there will actually be no official supply of luxury products, explained Marina Malakhatko, DIRECTOR of the retail department of the Russian office of the consulting company CORE. XP (formerly CBRE). Georgy Rostovshchikov, founder of Fashion Hub Russia and president of the International Association of Buyers, gave a more positive forecast: against the background of sanctions, purchasing offices will flourish, which will be able to purchase goods through neighboring countries.