Export of luxury goods from Europe and the USA is prohibited. What is important to know

In Russia and the CIS countries in 2020, there were about 10.3 thousand people with ultra-high income, whose assets are worth more than $30 million, consulting company Knight Frank indicated in its latest report The Wealth Report 2021. Russia accounted for about 4% of the world’s billionaires and about 1% of millionaires in 2020.

But not only multimillionaires can afford luxury goods. In the research company Ipsos, about 1 million Russians aged 18-65 years are classified as wealthy consumers. Ipsos considers more than 70 thousand rubles as a high personal income or income per family member for Moscow. per month, in St. Petersburg – more than 60 thousand rubles, in other large cities – more than 50 thousand.

About 44.8% of these consumers, in the latest survey, which was conducted in the spring of 2021, answered that they had bought clothes, shoes or accessories from luxury brands in the last 12 months. Those who bought women’s clothing spent an average of 25.6 thousand rubles on their last purchase, 22.9 thousand rubles on shoes, and 17.1 thousand on leather accessories (bags, wallets, purses, belts). rub.

During the last purchase, men paid an average of 28.2 thousand rubles for luxury clothes. (that is, more than women), for shoes – 14.1 thousand rubles. (less), leather accessories – 14.5 thousand rubles. (also smaller).

Among the most popular brands in Russia, as well as in other countries, Gucci, Chanel and Christian Dior are in the lead, according to a joint research global consumer demand in the “true luxury” segment of the consulting company BCG and the association of Italian luxury brands Altagamma. Other popular brands last year included Louis Vuitton, Prada, Dolce & Gabbana, Giorgio Armani, Versace, Hermès and Hugo Boss.

According to the results of 2021, the Russian segment of premium clothing, footwear and accessories is estimated by the INFOLine-Analytics agency at 320 billion rubles, which is about 11% of the entire market.

The largest sellers of luxury goods are the Mercury group (operates, in particular, department stores TsUM in Moscow and DLT in St. Petersburg), Bosco di Ciliegi (operates the capital’s GUM) and Jamilco. Only the financial performance of Mikhail Kusnirovich’s Bosco di Ciliegi is officially known: according to the latest available data, in 2019, the revenue of Investment Global Ltd, on which the group’s business is registered, amounted to €89.2 million, or over 6.4 billion rubles. Mercury revenue in 2020 Forbes magazine appreciated in 82.9 billion rubles.

Regional players in the premium segment are slightly inferior in terms of turnover to Moscow companies, notes Georgy Rostovshchikov, founder of Fashion Hub Russia and president of the International Association of Buyers.

Nine fashion houses sell their products independently in Russia. The largest revenue under RAS in 2020 was recorded by the “daughter” of Chanel – more than 12 billion rubles, the top three in this indicator also included local legal entities Cristian Dior (5.3 billion rubles) and Hugo Boss (4.4 billion rubles) . Data for 2021 is not yet available.

Sales in Russia account for 2 to 5-7% of the revenue of the largest luxury brands, estimates Fashion Consulting Group.

The deliveries of the spring-summer 2022 collections have come almost in full, the assortment is enough for full-fledged work throughout the season, the TSUM press service assured, refusing to evaluate the sanctions before they are officially announced.

RBC sent inquiries to Bosco di Ciliegi and Jamilco.

The main difficulties are now associated with foreign exchange settlements, while European suppliers are working in their usual mode, states Rostovshchikov. “You need to understand that now the corners and boutiques of a small number of companies directly owned by Western brands are not working,” says the buyer. “At the same time, Prada can be easily bought at the corporate corner in Novosibirsk and Balenciaga in Vladivostok.”

All Russian players will have enough inventory for an average of one to three months, Rostovshchikov continues. In parallel, in his opinion, there will be a transformation of the market, in particular, the flourishing of purchasing offices, which in a consolidated way can make purchases of goods to any country through neighboring countries. “This is such a VPN in the fashion world,” RBC’s interlocutor jokes.

The main task now for sellers is to form a commodity stock for a significant period of time, Mikhail Burmistrov, General Director of INFOLine-Analytics, believes. So, in his opinion, the first steps in order to slow down the washing out of stocks will be the delivery of goods to Russia, the stop of promotional activity and an increase in prices. “At some point, the active phase of the “military operation” will stop, and the situation will stabilize into a cold approach, when you can work with the country, but it is advisable not to advertise,” the expert argues.

If there are restrictions on the import of goods worth more than €300, then there will actually be no official deliveries, Marina Malakhatko, senior director of the retail department of the Russian office of the consulting company CBRE, believes. If the cutoff is, for example, €3,000, then the market is more likely to be “alive than dead”.

In six months, a market of intermediaries may emerge, Malakhatko believes. Colliers International Managing Partner Nikolai Kazansky predicts an increase in the share of parallel imports from representative offices registered in neighboring countries.

If sales go through intermediaries, then prices will increase by another 20-30%, and not only because of the resellers’ margin, but also because logistics and customs costs will become even higher, Malakhatko warns, recalling that luxury brands have already raised prices following the rise in the dollar and euro.

We should expect a multiple increase in the share of counterfeit goods in some categories, Kirill Kirillov, COO of BrandMonitor, is sure. According to him, this will be due not only to the absence and decrease in legal imports of products, but also to the weakening of the ruble and a decrease in purchasing power. “It’s important to understand that OEM sellers have limited price control,” explains Kirillov. “While the sellers of counterfeit products, having a margin of hundreds and thousands of percent, may not raise prices even in the current situation.”

According to BrandMonitor, the volumes of the markets for original luxury and fake luxury in monetary terms are almost equal: at the end of 2020, counterfeit sellers earned about 248 billion rubles.

The influence of Korean, Middle Eastern, Turkish premium brands will increase, loan sharks admit. But he also notes that Russian customers, although they are interested in new products, are very conservative in their preferences, especially when it comes to the region where the products are made.

In theory, the withdrawal of major luxury brands from the Russian market could free up a niche for Russian designers, designer Igor Chapurin believes. But he is not sure whether they will be able to fill this niche qualitatively. Nevertheless, Chapurin highlights several advantages.

“Firstly, a part of the audience that is used to buying foreign luxury brands will inevitably pay attention to Russian fashion,” RBC’s interlocutor believes. – And secondly, retailers will be more willing to cooperate with Russian designers: they are cheaper, they are nearby, and you can always negotiate with them. It is possible that sellers will also change their attitude towards Russian brands, who will be more willing to buy collections, rather than take them for sale, as was the case before.”

But to live up to the concept of “luxury”, Russian designers “will have to work hard,” Chapurin admits. “For all these years, high-quality fabrics and accessories have not appeared in Russia. We, as a brand, regularly test domestic materials, but they cannot be compared with fabrics from Italy, France, Japan,” explains the designer. – Of course, some fabrics can be replaced with Turkish or Asian ones, but this applies to very basic cottons, perhaps some types of silk and wool. But when it comes to truly designer fabrics that surprise with their texture or prints, they cannot be found either in Turkey or in China.”

Now Chapurin’s team, according to him, is looking for ways to deliver fabrics through intermediaries, since it is almost impossible to work directly with European suppliers due to logistical problems.