AFTER THE REVOLUTION: DESIGNERS CAPITALIZE ON NEW, RICH RUSSIANS

Byline: Natasha Singer

MOSCOW — What a difference a decade makes. Once-Soviet citizens from the Russian part of the Union, characterized as wearers of monotonous, drab clothes, are now whooping it up on Western style.
As Russians mark the 10th anniversary of the dissolution of the Soviet Union and the rebirth of Russia as an independent nation, this city is full of avid shoppers and the streets around the Kremlin are in full high-fashion swing. And accompanying the disposable income in more consumers’ pockets is a fashion savvy that’s come from 10 years of luxe education and exposure to high quality and designer labels.
At a time when retailers in America are still reeling from the economic fallout of Sept. 11, the Russian economy is experiencing an upsurge: The currency is stabilizing, income taxes have been reduced to a flat 13 percent, and retail trade increased by 10 percent in the first half of 2001. In the next three years, 26 shopping malls are scheduled to open in Moscow alone, adding nearly 11 million square feet of retail space. One new downtown mall, Pushkin Square, is building 753,000 square feet of floor space. Among the latest openings, next week, a new two-level Etro store is slated to bow in Petrovsky Passage by Bosco di Ciliegi, the owners of MaxMara, Givenchy and scores of other stores; megaretailer Jamilco said it intends to open a freestanding Burberry in the place of its Yohji Yamamoto store that’s closing.
“This place is amazing. It’s happening here, it’s really happening!” said an amazed Kenneth Jay Lane, the society jeweler, at a recent party sponsored by Vogue. “You don’t know what to expect when you come here, but what you find is a big town full of boutiques, restaurants, and gorgeous, gorgeous girls. The men, of course, are dogs and need desperately to be Ralph Laurenized right this instant, but the women are delicious. I think Moscow is becoming more and more important as a world center.”
In fact, much of the current Moscow nightlife is fashion-related as the three major high-end retailers — Mercury, Bosco di Ciliegi, and Jamilco — that have sprung up in the last decade compete to keep their sought-after clientele happy and busy. During one recent week, the Moscow A-list attended a Kenzo men’s wear show, with celebrity models strutting their stuff in the neoclassical white foyer of the Bolshoi Theater; feted the second anniversary of the opening of Russia’s Hermes boutique on cobblestone Stoleshnikov Lane; waxed rhapsodic over a Mercury-sponsored concert by sexpot violinist Vanessa Mae to inaugurate its Tiffany boutique, and thronged the Bolshoi Theater for a ballet gala, a Bosco special event with dancer Andris Liepa.
“Our clients have been everywhere and seen everything, so we need to do something special to surprise them,” explained Alexander Reebok, general manager of Mercury, the company that caters to the most elite Russian clientele. Mercury owns Russia’s Gucci, Fendi, Dolce & Gabbana, Zegna, Chanel, and Brioni franchises, as well as fine jewelry stores that sell Chopard, Piaget, Patek Philippe, Bulgari and Tiffany. Last October, the company opened the country’s first Armani boutique, a massive three-floor 8,000-square-foot extravaganza.
Mercury goes all out when christening its new ventures, and for good reason: “We are creating occasions for people to wear what they bought from us,” said Reebok. Mercury recently brought in Metropolitan Opera and Maryiinksy conductor Valery Gergiev for the opening of its two-story Zegna flagship; hosted French actresses Catherine Deneuve for a Chaumet party and Carole Bouquet for the Chanel launch; staged a Moscow fashion show with the Fendi sisters, and threw a charity event at $1,700 a ticket at the Bolshoi Theater, at which Jose Carreras and Sarah Brightman performed.
“The Bolshoi fund-raiser was particularly successful because it gave our clients a chance to put on their gowns and their jewelry and drink Moet Chandon. They did and they looked great. It’s very important for us to create a social life for people,” Reebok added.
Mercury’s advent as the country’s premier purveyor of luxury goods is a major success story. The company began in 1993 as a tiny 270-square-foot jewelry store in the lobby of Moscow’s Radisson Slavyanskaya Hotel, where it sold Chopard pieces. In 1996 the company opened a second location on Tverskaya, the capital’s main street that runs into Red Square, and in 1997 acquired Moscow Trading House, a 21,500-square-foot multibrand store that sold a range of brands including Dolce & Gabbana and Jil Sander. Mercury renovated and expanded the property and took over an entire city block, adding freestanding Zegna and Fendi boutiques, as well as Gucci, Chanel and Brioni in-store shops plus a jewelry emporium. The company’s latest project is an 86,000-square-foot development on both sides of a historic shopping street near Red Square that includes the new Armani behemoth as well as new Gucci, Dolce & Gabbana, Tiffany and Baccarat stores. Next spring at the same location, Mercury plans to open freestanding Frette, Graff and Tod’s shops, along with a Bentley dealership, a Chopard Cafe and Russia’s first — and much-awaited — Prada boutique. It’s one-stop shopping for the Russian elite.
“Our customers are the same as affluent clients the world over — people with high incomes, bankers, politicians, oil- men, metals traders, people who travel, who buy limited-edition watches, who charter yachts. What changed in the Russian market over the last few years is that clients became educated. Whereas before they just wanted to buy something expensive, now they better understand brands, quality and value for money. Before, Moscow stores sold stock and out-of-season pieces, but we now have to be in season, just like anywhere else in the world,” Reebok observed.
“Our clients are shopping all over the world, which means not only that when we open a luxury franchise it has to look exactly like it looks in Paris or Milan, but also that we have to provide them with something extra, such as a bigger selection and more attentive service than they can get abroad,” he said.
To that end, a number of Mercury boutiques have VIP rooms, including the Armani boutique’s exclusive evening gown salon with its cathedral dome and skylights. Mercury sent out a thick glossy catalog to 10,000 of its best customers at holiday time and plans to print its own magazine this year.
For the moment, Mercury plans to concentrate on its new luxury complex in the heart of historic Moscow, and Reebok said that, aside from the planned launches, the company is not aggressively going after new brands to add to its stable. So far, 60 percent of shoppers at the Armani complex are new customers to Mercury, but expanding its client base, he added, is only one of the goals of the luxury outpost.
“What we’re really trying to do here is re-create Russian history because, in the 1870s, this street where Armani and Gucci are now was a luxury shopping destination belonging to merchants named the Tretyakov brothers. It was the first and only private street in Moscow. We can see from old photos that there was a Swiss guy selling watches and a store with French fashions called Ready-to-Wear,” Reebok pointed out. “So luxury is a Russian tradition.”
Mercury is not the only retailer in town taking advantage of the current nostalgia here for lost traditions and expanding its real estate by taking over historic downtown locations. Bosco di Ciliegi — the company that owns a chain of eponymous designer multibrand department stores and a fancy perfumeria in the GUM galleria, along with freestanding Givenchy, Nina Ricci, Hugo Boss, Calvin Klein, La Perla, Kenzo, Marina Rinaldi and Max & Co. boutiques in Moscow and a number of designer stores in Samara, Novosibirsk and St. Petersburg — recently purchased 97,000 square feet of retail space on the ground floor of Kudrinskaya Square, one of the monumental neoclassical multitiered skyscrapers commissioned by Joseph Stalin. When it opened in 1953, the 22-story, 525-foot-tall giant was home to the Soviet Union’s Air Force elite and housed four immense food halls that were closer to epicurean palaces than ordinary grocery stores. It is these cavernous neglected spaces, still decked out with inlaid marble floors; granite columns; stained-glass windows featuring pictures of meat, fish, bread and dairy products, and chandeliers as big as merry-go-rounds, that Bosco di Ciliegi plans to restore to their original grandeur, repurposed for modern retailing.
“The skyscraper project required a huge initial investment of $8.5 million ,and by the time we’re finished with it, the entire cost with renovation could go as high as $20 million,” explained Mikhail Kousnirovich, Bosco di Ciliegi’s director. “I want to do a dual-purpose site that capitalizes on the building’s history where, on the one hand you walk into the most fabulous building in Russia of the 1950s and, on the other hand, it’s a terrifically stylish, contemporary shopping venue.
The site is to include an immense multibrand designer clothing store, a perfume and accessories shop, a retro Soviet-style ice cream parlor, a Russian “gastronom” reminiscent of the original Soviet-era food stores, a hall of imported delicacies, a restaurant and a “Bosco club” for frequent shoppers where child care is available. When it opens in 2003, the complex will also include a private label store for an inaugural line of Bosco clothing; the company just spent $1 million to dress the Russian Olympic team for the Salt Lake City games and in conjunction with the games launched a line called Bosco Sport.
“The idea is not only to make the new complex a destination, but to create an environment and build our brand. We’ve done extensive renovation work in GUM and Petrovsky Passage, where we have monomark designer boutiques and our own multibrand stores, [and where the new Etro store is opening on March 29] but there’s only so much you can do to an existing site. The new complex will be ours and ours alone, with our own identity. This will allow Bosco to get involved in whatever projects fit in with brand development, whether it’s opening a boutique hotel or an airline or a movie theater or luxury cosmetics,” said Kousnirovich, sounding every bit like a budding Russian Richard Branson.
“When you go to Bergdorf Goodman, at the end of the day you are shopping there because you believe in the store’s taste and its ability to spot the newest, hottest young Australian designer. You’re not there because of the Australian designer — you’re there because you trust what Bergdorf Goodman stands for,” Kousnirovich explained. “We have 10,000 frequent clients who represent 60 percent of our business. They rely upon us to bring them something unique as well as high quality. In Moscow, you have 25 events a night to choose from, 50 theaters, 200 restaurants, and woe unto you if you show up wearing the same thing twice. We’re building the new complex because people need somewhere to go and get dressed up.”

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