Seeking Russian Gold: Despite Turmoil, Brands Rush to Booming Market

Fashion and retail firms are heading to Russia in droves, attracted by a vibrant economy, a free-spending elite and a demand for style and status.

Dorota Gutkowska, general manager of Levi Strauss in Eastern Europe, said Russia doesn’t hold as much potential as the Central European countries that just joined the European Union. She noted that Levi’s has been sold in Russia since the early Nineties, with distribution at present through 103 Russian stores, 31 of which are Levi’s-only stores. Five stores are in Moscow. A 2,000-square-foot flagship opened early this summer on Tverskaya Street, a favorite shopping destination for young Muscovites.

“Nevertheless, in the longer term, the sheer size of the country and its consumer base makes Russia a market with interesting development opportunities for branded goods companies,” she said.

On the West Coast, doing business with Russia is seen as too problematic due to a plethora of reasons ranging from strongmen to style.

“Well, it’s the [cold] weather there and the currency exchange for two things,” said Ilse Metchek, executive director of the California Fashion Association, who said California manufacturers tend to not do business with retailers in Russia. “And, it’s the size of the people. Our manufacturers are oriented to juniors’ and contemporary and if you just envision Russians, there aren’t too many manufacturers here that make things warm and large.”

West Coast contractors are not sourcing goods from Russia, either. “I can only surmise that labor costs there are not as cheap as China,” said Joe Rodriguez, executive director of the Garment Contractors Association, noting even Vietnam or Cambodia would be more logical alliances because of their geographic proximity to California. “Whenever an American or Californian sources elsewhere, they’re looking primarily for the lowest costs. I would think they have other options here.”

On two separate occasions since 2001, a Russian delegation of retailers, including GUM, came to Los Angeles to buy goods. They went home empty-handed.

“[The retailers] were commenting on the fact that California style and American style [are] so different from European style, and European fashion is what Russia is leaning toward,” said Olga Karasik, a corporate attorney who accompanied the Russians on their tour. “On the flip side, they were finding it’s very difficult to sell Russian [goods] here. There’s a clash on every style level.”
Page:  « Previous ... Next »
load comments


Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
News from WWD

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

getIsArchiveOnly= hasAccess=false hasArchiveAccess=false