LONDON — Spending by Russian tourists is falling in the double digits, and the economic situation could deteriorate further if the European Union decides to tighten sanctions against the nation following the crash of the Malaysian Airlines passenger jet in eastern Ukraine last week.
EU foreign ministers met in Brussels Tuesday to discuss the possibility of imposing further economic curbs on Russia if the country is found to be responsible for the plane crash in a pro-Russian, rebel-held territory in eastern Ukraine.
According to a recent BBC report citing the EU’s statistics bureau Eurostat, the EU is Russia’s number-one trading partner, accounting for almost 41 percent of all its international trade. China is the country’s second-biggest trade partner, followed by Ukraine, Belarus and the U.S.
Even at the level of tourism, Russia’s trade relations with the rest of the world are under pressure. According to the latest figures from Global Blue, which tracks tourist consumption patterns, geopolitical tensions and the weak ruble have dented Russian spending.
In its report for June, Global Blue cited worldwide spending figures for tourists from a variety of countries. Some 84 percent of the spending tracked is done in European shops.
During the month, Russian spending was down 13 percent year-over-year, while among the Chinese it increased 5.7 percent, following a 1.8 percent uptick in May.
Overall tourist spend was flat for the month, following a decline of 5.3 percent year-on-year in May. The decline was 1.7 percent in the second quarter, following an increase of 5.2 percent in the first quarter.
Barclays said in a research note based on the Global Blue figures that, in its view, “The [European luxury] sector will show a deceleration in organic growth in Q2, compared to Q1…reflecting the softer tourism spending trends.”
Overall tourism spending in fashion and clothing was down 2.4 percent in June, with leather goods and bags declining 3.7 percent, and watches and jewelry falling 5.8 percent.
Meanwhile, the consumer mood inside the country remains morose, with many retailers partially canceling some fall shipments following a weak spring season, according to Andreas Kurz, founder and president of Akari Enterprises, a global retail consultancy, M&A advisory and executive search firm.
“Traffic is low; consumer confidence is low. People are holding onto their money,” said Kurz, who consults for a number of European and American brands that have done brisk wholesale business in Russia in recent years.
“Companies are bracing for lower orders going into spring 2015,” he said, estimating orders could be shaved by 15 to 20 percent following weak sell-through so far this year. “When you talk about Ukraine, the situation is much worse,” he noted, estimating orders could be down by as much as a quarter.
The depreciation of the ruble means imported apparel is roughly 20 percent more expensive, he noted.
While it’s difficult to predict the fallout of the geopolitical crisis exacerbated by the plane crash, Kurz warned it could inhibit investments, mentioning that once-full malls are now starting to advertise vacancies.
On the luxury front, however, Versace seems optimistic about Russia, despite political tensions.
Earlier this week, the Italian brand opened a boutique at No. 12 Stoleshnikov Lane in Moscow, its second in the city. The 2,700-square-foot store carries ready-to-wear and accessories for men and women, and features a new interior concept developed by the brand’s creative director Donatella Versace and the London-based architect Jamie Fobert.
Not helping the foreign cause, however, is a growing nationalism at home that has taken aim on foreign brands and was gaining momentum even before the Malaysian Airlines tragedy.
Since the collapse of the Soviet Union, clothing and accessories with American and European symbols — stars and stripes, “I [heart] NY,” the Eiffel tower — had been ubiquitous in Russia and some Russians are looking to change that.
Since May, the pro-Kremlin youth movement Set (“Network”) has been staging events around the country called “Fashionable Russian.” They encourage young people to trade in their America-themed clothing and bags, as well as items bearing English words and European symbols, for clothes emblazoned with the Russian double-headed eagle, Vladimir Putin portraits and slogans such as “I’m Russian” and “Crimea Is Ours.”
“For us, clothing is a means of communication,” said Maria Alyoshina, a Moscow organizer for Set. “If we’re waging an information war, this is our weapon.”
Calls for patriotic style have taken a variety of forms. A popular video recently posted on YouTube features a young man heckling a Taylor Swift look-alike in a stars-and-stripes tank top for “stupidly” betraying her country, urging her to burn it.
Underlying such nationalist stunts is a real, growing interest in domestic fashion, said Russian designer and street style pioneer Vika Gazinskaya.
“Something in the air is changing,” said Gazinskaya, whose clients include Russian socialite Ksenia Sobchak, as well as Hollywood actresses such as Elle Fanning. “After some positive changes in our country, like the Sochi Olympics and winning the Hockey World Championship, we’re getting into the mood that we should love our country, respect our roots, and fashion is part of what people are focusing on.”
More than a month ago, Set organized a “Fashionable Russian” event in Novosibirsk, where activists handed out 100 items of clothing to a small crowd in a central square. The most popular garment was a sweatshirt bearing a broad mishmash of Russian and conservative symbols: the Gazprom logo, cosmonaut Yuri Gagarin, a drawing of rainbow-colored men and the word “family,” separated by an equal sign with a slash through it.
Set’s biggest fashion event to date was an outdoor show in May in the Crimean port of Sevastopol. Called “Russian Spring,” the show featured work by young Russian designers with national iconography: headpieces in the shape of the double-headed eagle, folk art-inspired leggings, tops featuring the Soviet hammer and sickle.
Alexander Bichin, head of purchasing for Moscow department store Tsvetnoy Central Market, which stocks brands including Topshop and Marc by Marc Jacobs, said that demand hasn’t diminished for clothing with English words or other Western signifiers. “It’s important not to exaggerate the influence of the political situation on demand for designer collections,” he said.
“Still,” he added, “I decided not to order T-shirts with Barack Obama’s portrait from the Eleven Paris collection.”
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye