The present and future luxury market in Ukraine – an expert view by Maurizio Aschero

Gucci Kiev

Maurizio Aschero, one of the top luxury professionals in Ukraine with a vast experience internationally shares with CPP-LUXURY.COM his views on the world of luxury.

You are a luxury industry professional with an extensive career in retail. What are the most motivating aspects of the luxury business for you ? and which are the least motivating ?

I am convinced that behind real luxury lays a culture which does belong to East Europe and which unfortunately has been annihilated by 70 years of moral and material misery.  I pride to contribute in giving back to these countries what belongs to them. History teaches it. Ukraine, Russia, as well as Romania, have a long tradition of noble families. An aristocracy which spread throughout Europe in 18th and 19th century.  Now, step by step, they are coming back. And our duty as luxury retailers consists in bringing back to them what was here already before the misfortunes of the communist era.

Luxury is a part of culture. Today, culture is still a luxury and that is what makes me angry. At the beginning of my career in East Europe I hoped (silly I was!) that the process of “normalization” could happen faster. Instead, as Darendorf said: you need 6 months to change a government, 6 years to change an economy, 60 years to change a culture. Today, we still fight against the people with lots of money and no culture. Against those who don’t want to lose the soviet habit of stealing and hiding.

Against those who (like is happening in Kiev in these days), give the authorization to build kiosks of sausages and vodka in the middle of the most luxury area, Passage.

As soon as we try to make one step forward , we go two steps back. And bribes (the only culture today here) must fly around in order to settle the situation.

In the short term, the indicators don’t show any improvement, but a worsening. The only hope is in the next generations. But we still fight.

From your experience, which do you think are the defining elements of a successful luxury retailer ?

Vision. Perseveration. Investments. Patience. Knowledge.

How do you evaluate if a market is mature enough for a mono brand store versus multibrand ?

For several years, clients privileged the monobrands because they felt safe and rewarded in spending lots of money in strong brands. They were driven by strong marketing and PR, and felt part of the brand itself. When the big brands started to sell off, worldwide, their stuff in order to fill the cash desk in time of crisis, the trust of the clients decreased dramatically.They felt betrayed.  Having less money in the pocket, it was highly disappointingly to see the bag they bought for 2.000 Euro on sale in Milan or Dubai for 500. So, they turned to multibrands.  Now our multibrands are far more successful than mono. People is looking now for different experiences. For a wider choice, for a lighter atmosphere. For different categories of products, at once. From books to shoes, from fine foods to bags, from home decoration to coats, everything in one store.  Monobrands today are the dinosaurs of the business. They got too fat and they move too slow.

 In a few words, how would you describe the Ukrainean luxury consumer? How different is it from the Russian consumer and from the European consumer?

Ukrainian luxury consumer is changing attitude, thanks God. They are refining their choice and they understanding. They travel and broaden their specific culture. They are getting nearer to worldwide taste and social behavior. Russian customer is no different, just, richer, and the Moscow client has more choice. Real department stores and real multibrands are in Moscow since years, while in Ukraine we are still eons behind

 What is your strategy in convincing Ukraineans to buy locally and not in international locations? What is, in your opinion, the percentage of Ukraineans which buy abroad, compared to those who buy locally ?

Price level, mostly. Our prices don’t differ (or in few case, just 10-15%) from Paris, London, Milan.  We try hard for the best service, and the choice of good. We don’t cheat on our clients. We don’t sell off the goods, even in case of low results. We don’t consider the client a cow to milk, but a partner, a friend.

All the local clients  buy abroad as well.  To buy abroad is part of the travel experience.  But if you means if they only buy abroad, very few clients do. Ukraine is their home, our stores are their stores.

Have you noticed major changes in the consumer profile (Ukrainean) since the debut of the crisis?

Of course. They check the quality, the prices, they buy less but not necessarily cheaper, they are keener in being driven to the right purchase, so they trust in our staff which we constantly train. Service , today, is a key factor, more than before.

 Could you give us an estimate figure of how many Ukrainean people spend more than EUR 50.000 per year  for luxury goods ?

You said that officially more than 25.000 people in Ukraine have an income over 5 mln USD. I would quintuplicate this figure, unofficially.

What is the current situation of the luxury market in Ukraine and how do you think it will develop in 2010 ?

It won’t develop. Bulgari just opened now in Passage, few jewels store will open soon. But generally  the depression here just started. January election will only worsen the story.

 Please name the top three best selling luxury fashion brands in Ukraine.

I can mention what are the best selling in Helen Marlen Group : Cavalli, Louboutin, YSL. I know, it sounds strange. But this is the reality.

If you were to develop a luxury business yourself, which would that be?

A real, innovative, great concept store.