Russia’s luxury market shows signs of recovery, yet some sectors remain in difficulty
According to reports and interviews published by Russian business media, sales of key luxury industry players have been showing signs of improvement in the past three months. Particularly, Bentley and Ferrari are the top performers of the auto sector with a 50% year on year increase in sales. Sales of watches increased by over 40%. Leading Russian luxury retail group MERCURY also registered sales increases of up to 15% in its key locations such as the Tsum Department Store in Moscow.
However, according to a research of CPP conducted early March, sales of luxury jewellery and accessories, including mobile phones have stagnated during the first quarter of 2010 and not likely to show any increases before the end of the Summer season. Sales to wealthy Russians travelling abroad have also decreased, one such example being Dubai which has long been a favorite destination. Some luxury brands present in Dubai report a decrease of up to 50% in sales to Russian nationals during the first 6 months of the year. Similar negative figures have been registered in Milan and Paris. It seems the only major increase of sales to Russians has been in real estate, London remaining a top preference. Oliver Petcu of CPP believes there are two main factors which have been driving the negative trend, one which is due to the clear drop in fortunes and another one which has to do with the inhibition factor.