Italian OVS reopens stores in Russia

While some Western retailers left the Russian market due to the military conflict between the Russian Federation and Ukraine, the Italian clothing chain OVS, on the contrary, decided to return to the country. The brand opens its first stores during another period of turbulence in the ruble exchange rate, although it was precisely for this reason that it left the Russian Federation nine years ago. Despite the reduction in spending by Russians during the crisis, the capacity of clothing retail remains significant – this could push the return of OVS. However, experts warn that with the strengthening of the positions of local brands, competition in the market has increased noticeably.

The clothing brand OVS, operating in the mass market segment, founded in Italy in 1972 and now operating 2 thousand stores around the world, will open the first family format sales point in the Russian Federation with an area of ​​780 square meters. m in November 2023 in the Vegas Crocus City shopping center, the Crocus Group, which owns the facility, told Kommersant. They note that this year it is planned to open seven brand stores, and by the end of 2025 – up to 50 points of sale throughout Russia.

The development of the brand in the Russian Federation is carried out by the distributor Smart Casual Group (SCG; it also imports clothing from the German brand Gerry Weber and the French brand Gertrude+Gaston into the country). The company did not respond to Kommersant’s request, as did the OVS head office. Judging by information from the HeadHunter portal, the distributor is now actively recruiting staff for stores that will operate under the OVS brand.

At the end of last year, it became known about SCG’s plans to develop the OVS Kids brand in Russia exclusively with children’s clothing (see “Kommersant” dated December 23, 2022). However, the company has apparently revised this concept by adding men’s and women’s clothing.

This is not the first attempt for OVS to enter the Russian market. In 2010–2014, the brand was developed in the country under the franchise of Maratex Fashion Retail Company, part of the Polish EM&F. According to Fashion Consulting Group CEO Anna Lebsak-Kleymans, at the end of 2012 there were 64 brand stores operating in Russia. But EM&F’s Russian business suffered from severe currency fluctuations in 2014, and the company was forced to close all the OVS stores and other chains it had developed in the country. The Italian brand returns to Russia during another period of ruble instability.

After the departure of such large chains as the Swedish H&M and the Spanish Inditex from the Russian Federation, the opening of stores of a European brand is an atypical situation for the Russian market. Although 27 new brands have appeared in the country over the past year and a half, 78% of them, according to Nikoliers estimates, are from countries “friendly” to the Russian Federation, including Turkey, Lebanon, and Belarus.

According to the company, since last year, out of approximately 140 international brands operating in the Russian Federation, 32 retailers have ceased operations in the country, and 52 have resumed operations after changes in the ownership structure of local businesses. Thus, Women’secret transferred management of the chain to the Belarusian Fashion House, Mango to the Turkish Fiba Retail, and Reebok to FLO Retailing.

Even despite geopolitical tensions, not all European brands, according to Ms. Lebsak-Kleymans, want to lose the Russian market and maintain business contacts with local partners. According to her, retailers from Italy and Germany are “particularly constructive” in this regard. According to the British analytical center GlobalData, even before the crisis that began in February 2022, the Russian Federation accounted for 10% of all clothing sales in Europe – the same amount was in Italy and the UK. In addition, not all large cities of the country have such a saturation of clothing brands as in Moscow or St. Petersburg, which gives retailers space for development, notes Nikoliers partner Anna Nikandrova.

However, over the past year and a half, competition in the Russian clothing market has increased noticeably, say market participants interviewed by Kommersant. The departure of major foreign players increased interest in Russian brands, which began to increase the number of loyal customers, notes Liliya Bulatova, general director of Gloria Jeans. Moreover, according to Anna Lebsak-Kleymans, a high concentration of players due to the growth in turnover is now observed in the budget clothing segment, in which OVS operates.

Alina Savitskaya