UKRAINE, worst affected luxury market in Eastern Europe
The Ukraine, once the leading luxury market in the region, after Russia, continues to be heavilly affected by the international crisis, with little hope for any recovery earlier than 2011. Moody’s Investors Service has downgraded Ukraine’s foreign and local currency government bond ratings to B2 from B1, and assigned a negative outlook, mainly to reflect the continuing fragility of both the Ukrainian economy and its banking system, the agency said in a press release on May 12. This is only cause of further worries in the local luxury industry, which is controlle by few local companies, especially through franchising and exclusive distribution agreements. Worst performing sectors remain fashion, jewelry and auto, with declines in sales of up to 35% in the first quarter of 2009.