Russia struggling to replace departing retailers as economy falters

The number of international fashion labels entering the Russian market fell by 30% in 2015, reflecting the continuing economic crisis and the falling value of the rouble.

A number of European brands left the market, including the UK’s River Island, Dutch label Mexx, Italy’s OVS and French label Camaieu. Finnish brand Stockmann has also announced its departure from Russia.

At the same time 26 new fashion retailers made their debuts in Russia, including Pimkie and BNS Group brand Korners, according to research by Colliers International. Lingerie brand Victoria’s Secret opened its first Russian boutique in February 2016, while British department store Debenhams announced plans to move into the stores vacated by Stockmann.

European brands accounted for 70% of new fashion operators in the Russian market, led by Italian labels, which accounted for almost one-third of the total, according to Colliers. Japanese, Korean and Vietnamese companies also opened single-brand fashion stores.

Nikolai Kazansky, managing partner of Colliers International in Russia, said: ‘On the one hand, we are seeing a mass exit of retailers, but on the other hand, the impending issues faced by retailers were identified before the crisis. Successful brands continue to develop rapidly across the country, opening up new areas for themselves. Notable examples in this regard are the Inditex Group and LPP.’

Russia’s GDP shrank by 3.8% in 2015, according to figures from the Federal State Statistics Service, while the rouble’s value fell by 25% against the dollar and 13% against the euro over the course of the year.