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Gucci Assumes Control of Russian Stores

Rising tensions between Russia and Ukraine and are not stopping the company from directly entering the Russian retail market.

MILAN — Rising tensions between Russia and Ukraine and growing pressure from the international community against Russia’s annexation of Crimea are not stopping Gucci from directly entering the Russian retail market.

The luxury fashion group also has plans to open two wholly owned stores in Moscow in the second half of the year. One unit will be located in the Gum department store, while the other, a four-level flagship, will be in upscale shopping hub Petrovka Street.

“The decision to assume direct control of our retail network and operations in Russia is wholly consistent with our ongoing strategy to further enhance the consistency of our customers’ experience across different markets through progressively taking control of stores that have historically been operated by franchisees and wholesalers,” said Patrizio di Marco, president and chief executive officer of Gucci. He underscored how this strategy has been successful in the U.S., the Gulf area and India, before Russia.

Asked to address the current uncertainty surrounding Russia, a Gucci spokesman said, “This is a long-term view and we have been working on this direction for years,” reiterating di Marco’s view on the group’s consistency of direct distribution in markets around the world.

The brand opened its first Russian store in 1997 and currently counts a total of six units in the market, including monobrand boutiques and corners in luxury villages and malls. Gucci has now taken over direct control of the retail network and operations for its three existing stores in the Moscow area — Tsum, Kutuzovskiy Prospekt and Barvikha Luxury Village. However, the relationship with its local partners continues for its three stores outside Moscow, in St. Petersburg, Sochi and Ekaterinburg. As per Gucci’s strategy, the company will focus on progressively taking control of the most relevant stores, while maintaining a limited number of monobrand franchised stores and doors in select multibrand retailers.