Crisis “in the brain” dropped sales in luxury by 20%
07.10.2015 14229

Crisis “in the brain” dropped sales in luxury by 20%

The players and experts expect the recovery of the clothing and footwear market in Russia only next year. The luxury segment is no exception - at the recent conference of the Franco-Russian Chamber of Commerce “La Jounrée Luxe”, preliminary results of 2015 were announced, according to which the decline will be 20% compared to 8% in 2014.

“Lux has a fairly stable position, that is, if we say that the middle price segment decreases by 35%, then in the luxury segment the reduction reaches about 10%. We can say that the luxury market will suffer to a lesser extent. The main blow will be on the mid-market. The share of the luxury segment in absolute terms will decline by 10%, in the worst case by 20% at the end of the year. Consumer activity has dropped sharply, the flow of buyers in shopping centers has decreased from 20 to 49%, street retail has decreased by 60%, "- said Anna Lebsak-Kleimans, CEO of Fashion Consulting Group at the conference.

Daria Yadernaya, general director of Y-consulting, believes that the reasons for the decline in sales in the suite are purely psychological and associated with the “poor rich” paradox. “During the crisis, as a rule, the incomes of those 20% of wealthy buyers who provide 80% of the revenue in the luxury segment are not significantly reduced. Yet more and more we are faced with the paradox of the "poor rich" - ultra-wealthy shoppers who are cutting back on their purchases and frequency of shopping, rationalizing their choices and reorienting to more budget options. Interestingly, this is largely a sign of the current recession, and its reasons are predominantly psychological and social, rather than economic. The structure of income of this category of buyers is highly diversified, which allows them to feel material stability even with currency fluctuations, or the level of their income is so high that its reduction does not transfer them to another social category. At the same time, the consumer expectations index, including in this group, is at a very low level, which affects the marginal propensity to consume. The psychological sense of the crisis turns out to be more important than the economic realities in the budget of individual buyers. As a result, the frequency of visits decreases, as well as the number of positions in the check, ”said Daria.  

“Today the Russian luxury market ranks 11th relative to other countries, its volume was estimated at 4,6 billion euros last year, with Moscow accounting for 3,5 billion euros. For comparison, the Russian market is equal to 1/10 of the American luxury market, and the Moscow luxury market is 3 times smaller than the Paris luxury market, ”said Vladimir Biryukov, partner at Deloitte CIS.

The main share of the luxury market in Russia is, as already mentioned, in Moscow and St. Petersburg. The regions still occupy 25%, which are divided by Yekaterinburg, Rostov-on-Don, Novosibirsk, Samara, Nizhny Novgorod, Chelyabinsk, Kazan, Krasnoyarsk, Perm, Volgograd, Ufa, Omsk and Voronezh.
Players and experts expect recovery of the clothing and footwear market in Russia only next year.
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