Stella McCartney's Russian return a boutique affair
By John Bowker and Lidia Kelly
MOSCOW (Reuters) - Through the window of Moscow's premiere department store, home of her new boutique, Stella McCartney can look out at the glitzy shop that, at the peak of Russia's lavish spending, used to be all hers.
The return of the British designer, who on Thursday night opened her concession at TSUM -- prime retail space only steps from fabled Red Square -- cements the revival of the country's love for luxury.
The comeback, via a partnership with TSUM, was more subdued than the grand opening of McCartney's own store in 2007, which closed after only 18 months when the financial crisis halted Russia's seemingly insatiable demand for expensive clothes.
"The current global economic environment has made these companies thrifty. They are not willing to spend that much on a market that may prove risky and volatile for their brand," said Ekaterina Petukhova, head of Esper Group, a Moscow-based fashion consultancy.
Russia's luxury market is set to grow by 16 percent this year, significantly outpacing the world's 10 percent growth rate, according to Esper Group.
This is a huge improvement over the past couple of years when the exuberant spending of the Russian customer -- whose wealth is often rooted in the country's vast natural resources such as oil, gas and metals -- nearly halved.
But the expected growth this year is still some distance away from the gains pocketed by famous designers before the crisis.
"We speak of a quality revival of the market, i.e. customers shopping for luxury and frequenting stores but the foot traffic is still below the pre-crisis level as well as the average bill amount," Petukhova said. Continued...