Luxury goods demand in Russia is declining, but these five brands are seeing sales growth

According to a report by Bulgari Rasha, a subsidiary of LVMH Group, border closures caused by the epidemic are one of the reasons for the increased demand for both companies' products.

Christian Dior Couture Stoleshnikov, a subsidiary of Dior, showed the highest sales growth, reaching 5.3 billion rubles, almost 49%, setting a new growth record for the company.

Prada Rus, a subsidiary of Prada, saw sales rise by a third to 3.9 billion rubles, as the company’s physical stores in Russia were closed in the first half of the year due to measures to prevent and control the coronavirus pandemic, and revenue for the entire group fell by 24% to 2.4 billion euros.

According to Bain Calculation & Somrapu, the total global luxury goods market fell 23% to $217 billion.

Irina Kulikova, an external expert at Bain & Company, said in February that the overall trend of the Russian luxury goods market, from the perspective of the retail market and the luxury goods market, is almost the same as the international market. According to the company's calculations, the personal luxury goods market fell by 23% due to the impact of the epidemic.

However, Kulikova said there are some positive factors in the Russian market. For example, from May to June 2020, Russia did not have strict quarantine regulations like most European countries, and restrictions on moving abroad led some consumers who previously bought luxury goods abroad to start buying in the Russian market.

She also said that despite the absence of foreign tourists, both GUM and TSUM indicators in the third quarter of last year exceeded 2019 levels, with foreign tourists accounting for 10%-15% of its sales.

TSUM 's parent company, Mercury Group, said that despite two months of quarantine, sales of its jewelry and watch divisions increased in 2020. However, the group did not disclose detailed data.

It is understood that sales of some boutiques in Barvikha Luxury Village have increased by more than 80%. The company has not disclosed the absolute value and dynamics of annual revenue.

Fendi Russia's revenue fell last year, down 12%, a decline the company attributed to "decreased purchasing power and reduced business activity."

Likewise, revenue at Hugo Boss subsidiary Hugo Boss Rus fell by nearly 5.5 billion rubles last year to 4.4 billion rubles. Sales at the entire Hugo Boss group fell 33 percent.

Russia