The shelf is never empty – Kommersant

In the first quarter, stores in the Russian Federation opened eight new foreign brands of clothing and household goods at once: mainly from Turkey, but there are also chains from France and Poland, which resumed work after a break. After a year ago, Western brands began to curtail business in the country due to hostilities in Ukraine, niches for other foreign chains were vacated. Basically, retailers operating in the mass segment are now entering Russia – the presence of luxury sellers is complicated by direct EU and US sanctions. Therefore, experts expect, in the future, mainly Turkish and Chinese retailers from the mass market will appear.

As calculated for Kommersant in CORE.XP, eight new foreign brands entered the Russian market in January-March. These are mainly Turkish chains – Loft Jeans, NetWork, Club, AC&Co and Madam Coco. But there are also players from the EU – the French children’s clothing retailer JACADI and the Polish PitBull West Coast. The last two brands, in fact, resumed work in the Russian Federation, as they opened their first points of sale until 2022, but then closed them, the consultants explain. Another brand of furniture and household goods is Swed House from Belarus. The opening of the first store of this network in Moscow, as reported by the media, did not live up to the expectations of buyers who were counting on the appearance of an analogue of the Swedish IKEA that had left the country.

Despite the influence of geopolitics, in the first quarter, almost half of the number of brands that appeared on the market over the entire past year entered the Russian Federation, CORE.XP notes. In Ricci | Blackstone claims that five foreign retailers appeared in Russia in January-March, compared to ten in 2022.

Negotiations to open most of the new stores have been underway since the second half of 2022, but consumers have only seen them on the market now, says Evgenia Khakberdiyeva, director of the retail real estate department at NF Group. The activation of foreign retailers is due to the completion of the process of terminating lease agreements in shopping centers with players who have decided to leave the market or reduce the area of ​​points of sale, says Alexey Vanchugov, managing partner of Vanchugov & Partners.

According to CORE.XP, since the beginning of 2022, only 15.38% of international retailers operating in the country have completely left the Russian market, and another 9.34% of networks have suspended their activities. According to CORE.XP estimates, in January-March 2023, the rental rate in Moscow shopping centers decreased by 5%, to RUB 71.2 thousand. for 1 sq. m per year.

All new brands that appeared on the Russian market in 2023 operate in the middle price segment, says Nadezhda Tsvetkova, head of CORE.XP retail space leasing. According to her, if earlier most of this segment was occupied by the Spanish Inditex and the Swedish H&M, now the vacant niches are being filled by Russian and Turkish brands.

Prior to the crisis, mainly luxury and premium brands came out in the Russian Federation, since the products of this price segment are high-margin, notes the CEO of Ricci | Blackstone Evgeny Kuzmin. But now this is practically impossible due to Western sanctions on the import of clothes worth more than €300 per item into Russia.

In addition, the demand for such goods is declining due to the decrease in the solvency of Russians, says Mr. Kuzmin. “In the mass consciousness, luxury is associated with European brands,” he says. “Even if they are replaced by high-end products from Asia, it is unlikely that they will be in great demand in Russia.”

At least 12 more foreign chains have announced that they will enter Russia this year, CORE.XP notes. Given the fear of secondary sanctions, Evgeny Kuzmin adds, Western players are unlikely to dare to enter Russia, mainly it is worth waiting for the emergence of new players from China and Turkey.

Daria Andrianova