Luxury goods manufacturers earned record high profits in Russia in 2021. They will not be able to improve their numbers in 2022 as many premium and luxury brands have left the Russian market since the beginning of the special operation in Ukraine.
In 2021, however, Russian local dealers of global luxury brands were increasing their revenues at an impressive pace and eventually demonstrated highest sales in the recent five years.
A RAS (Russian Accounting Standards) report on legal entities of eight international companies included in Deloitte's top 30 world's largest luxury sellers that operate in Russia independently.
Chanel LLC, the daughter of Chanel, took absolute lead in sales revenue increase in absolute terms — by 6.4 billion rubles. A year earlier, the revenue of the French fashion house dropped in Russia by 8.4 percent. In relative terms, Bvlgari Russia LLC, a subsidiary of Italy's Bvlgari (owned by the French LVMH group), demonstrated the highest sales dynamics — its revenue grew almost 2.5 times year-on-year, to 4 billion rubles.
The luxury market recovered last year after falling in the pandemic year 2020. As of the end of 2021, the Russian segment of premium clothing, footwear and accessories reached 320 billion rubles, RBC reports.
In the first days of March 2022, premium retailers started announcing decisions to suspend their activities in Russia. The owner of the largest fashion houses, LVMH Group (Bvlgari, Louis Vuitton, Dior, Fendi, Loro Piana, Berluti, Christian Dior, etc.), Chanel, Prada, Hugo Boss, Kering (Gucci, Bottega Veneta, Alexander McQueen, Saint Laurent and others) closed their stores in Russia. LVMH-owned Tiffany brand also stopped retail sales and refused to purchase Russian diamonds.