Crisis or no crisis, women in Moscow aren’t about to be caught dead looking drab. Shopping malls are still teeming with shoppers, and glossy magazines line the supermarket shelves.
In Moscow, most retailers have tried to offset declining consumer confidence by offering small discounts since the spring, instead of waiting until June to slash tag prices. The English brand Monsoon, which typically waits until July for the bargain season, this year began offering 17 per cent off for customers who bought at least two items from the prom dress collection back in May.
By July, most retailers had resorted to 70 per cent off in some sales.
Despite rising unemployment, some data suggest that not everybody has lost the shopping habit. According to a survey by TGI-Russia, 47 per cent of Russians say their shopping habits haven’t changed at all, while 31 per cent say they have stopped buying shoes and clothes and 7 per cent say they have downshifted to cheaper brands.
On the other hand, Bloomberg recently reported significant cuts in imports of apparel from Europe. Italian exports to Russia dropped by 20 per cent and French exports by 23 per cent, according to Reinhard Doepfer, head of the European Fashion and Textile Export Council.
German exports dropped less, by only 6 per cent, as they were less affected than the higher-priced Italian and French brands.
The council made a very pessimistic forecast that one-third of Russia’s 42,000 clothing retailers would close by year’s end. Most noticeably, several foreign brands have shut up shop in Moscow. Elite shoes brand Manolo Blahnik quietly closed down its expensive boutique on Malaya Bronnaya. British designer labels, a relatively new addition to the Russian fashion scene, seem to have been hit hard – Stella McCartney, Alexander McQueen and Vivienne Westwood have also departed.
In May, Kommersant reported that Russian Sport Fashion Group would close 13 of its Reebok stores, and the local franchisee for Hong Kong sportswear maker Sprandi International closed 37 outlets in Moscow and St. Petersburg after going bankrupt.
Most retailers have at least suspended expansion, and some are contracting, closing down less profitable stores in unpopular locations.
“Some retailers withdrew brands targeted at middle to high income customers, retaining only less expensive brands,” said Olga Yasko, analytical department director of Colliers International.
Rental rates in unfavourable locations may have gone as low as half the pre-crisis level.
“We’re witnessing re-negotiation of rates, tenant rotation is increasing, and vacancy levels have reached 15 per cent in Moscow and 25 per cent in a number of regional cities,” Yasko said.
There are still areas that have no problems post-crisis – mainly shopping centres close to metro stations, with a good mixture of tenants popular among shoppers. Yasko named Evropeisky shopping centre near Kievskaya, Metropolis near Voikovskaya, and Zolotoi Vavilon in Yasenevo and Otradnoye.
Meanwhile, one foreign brand may be getting its foot in the door – Japanese casual-wear Uniqlo. The company has been tight-lipped about its plans in Russia, but clothing industry sources say that a Uniqlo store might open in one of the malls in central Moscow next year.
‘The party’s over’
The Russian market, despite falling sales, is far from being the worst in the world, but it’s different from before the crisis, Alyona Doletskaya, Vogue Russia’s editor-in-chief, told RIA Novosti in an interview.
“If we look at the big picture, I think we all understand that the party’s over,” said Doletskaya. “We need to come up with new ideas … and this creates a huge driving force. All crisis management, at least the way I’d like to see it, brings out the best – the people whose brains work faster, better, more creatively.”
The change in the economic climate is already evident in the way some fashion houses conduct their business, she said. Usually, designers send out so-called “look books” every six months, a beautiful catalogue of the latest collection printed on luxury paper, with the items all numbered for easy reference and ordering in the case of a photo shoot.
“But then this American designer Alexander Wang tells us, ‘You know, we didn’t forget to send you the look book, we just don’t have any. And if you really need one, please pay to this account, and we’ll send it to you.’ Unheard of!” Doletskaya said. “They expect us not only to pay for postage, but for the cost of that little book.”
Olga Rusan, a young Russian designer who makes clothes exclusively to order, says that that has helped her business adapt to the changing times: “This gives us a great advantage over designers who sell mass-produced clothes off the rack. Our clients tell us their budget, and we discuss everything until both sides are satisfied,” she said.
There are ways to cut costs without affecting the result of the creation, Rusan said. Expensive French handmade lace can be replaced with less expensive guipure, silk with satin, or crocodile skin with python.
“My clients are using alternative, less expensive options more since the crisis,” Rusan said. “But I make sure the finished product gives them as much satisfaction.”
Rusan’s full-length dresses go from 30,000 roubles, while wedding dresses are from 50,000 roubles. That’s not cheap, but perhaps worth the money for a once-in-a-lifetime occasion.
Antidote to gloom
Many dedicated followers of fashion have noticed that their favourite glossy magazines have become slimmer and less unwieldy, as advertising has fallen off dramatically.
“Glossy magazines are no longer the Yellow Pages,” said Doletskaya, adding that many readers find that a good thing.
Vogue still has not resorted to skipping any issues, but Marie Claire put out a joint July-August issue this summer. “It’s the first time we’ve done a double issue, and we all had a month’s leave with only 50 per cent pay,” Svetlana Kolchik, deputy editor-in-chief of Marie Claire in Moscow, said in a telephone interview.
“A lot of other magazines are doing that too, it’s a challenging situation for a lot of us. Glossy magazines have become really thin. Summer is traditionally a time when advertising falls off and magazines are thinner, but this year, there was a really significant drop in advertising.”
Yet the seriousness of the crisis isn’t reflected on the covers of these glossy magazines.
“In Marie Claire magazines in Europe and the US, you’ll see plenty of articles related to the crisis, about losing jobs, about how to reinvent yourself, how to survive the crisis, things like that. But in Russia, we don’t do that,” Kolchik said.
“You see the crisis all over, in every newspaper, on TV, everywhere. Honestly, people must be getting sick of it. We glossy magazines give people something nice to think about, let them daydream, give them beautiful and exciting things. In Russia, the nature of glossy magazines is to provide people with a distraction, an escape.”
To begin with, the situation in Russia differs from that of Europe or the US, Kolchik said. With the majority of the population earning salaries of a few hundred euros a month, no one wants to fork out money to buy a beautiful glossy magazine that plays up grim economic reality.
“The major theme of our latest issue was happiness,” she said.
“We tried to make the contents as positive as possible, to cheer the readers up. There are people who might be depressed, short of cash, scared and anxious about the future, so we’re giving them an antidote.”