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November 18, 2017
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Photo by Marc Hom (Source: serlinassociates.com)
Photo by KT Auleta
(Source: Russian Vogue - September 2007).

From functioning under a Soviet regime to the lack of support from today's government, the Russian fashion industry has faced its share of challenges to growing in the domestic and international markets. Despite these realities, however, the industry has undergone significant change in recent years. Russian fashion houses are creating magnificent collections and people on the streets of Moscow are looking stunningly stylish. Mass brands and independent boutiques are increasing in number, seasonal sales are taking place twice a year and fashion businesses are starting to bring in profits. Could it be that the Russian fashion industry has finally broken free of its stagnant past? In order to understand the current state of the Russian fashion industry and of domestic fashion brands, it is necessary to consider the country's historical, political and even geographic landscape.  

The rise of the Iron Curtain following World War II resulted in both an ideological and a military barrier between those countries dependent on the USSR and the rest of the world. The physical defences contained people living in communist countries within the Iron Curtain while also controlling the information and goods flowing in. Until the 1990s, Western fashion brands were outlawed in the USSR. To get a pair of jeans or a leather coat, Soviets needed to access the black market, sometimes at a risk to their bodily integrity. Due to the difficulty in obtaining imported goods, such goods inevitably came to be viewed as more valuable than domestic ones. This attitude persists today as Russian fashion houses continue to face consumers who prefer foreign brands to local ones. 

As a result of Russia's past, the fashion industry only began to develop in a material way post-USSR (post-1991) when Russian businesses slowly began to make the initial investments required to grow any industry. But not only did Russia enter the fashion industry much later than most countries, the development of it has not been supported by recent governments. Russian state policy focuses heavily on the oil and mining industries, often ignoring "light" industries such as fashion.  Furthermore, 80% of Russian fashion brands are produced in China, Turkey or Italy, because of the high cost of production on home soil. Coupled with rising product prices and limited distribution across cities, opportunities within the fashion industry have been scarce.

Denis Simachev for Apple 
(Source: denissimachev.blogspot.com).

Another challenge for the industry is the overall standard of living in Russia. Despite the fact that Russia is a leader in the consumption of luxury goods, in reality, such consumers are primarily located in Moscow and St. Petersburg. The majority of the population throughout Russia cannot afford to choose clothes based on brand; their choices are based on price. Accordingly, fashion brands, whether Russian or foreign, are not relevant to the majority of the Russian population.  

It is not surprising, then, that Russian brands command less than 10% of market share, with statistics showing that 79% of Russians aged 16 to 45 have at least two Western branded items of clothing in their wardrobe, and only 8% consciously buy clothes by Russian designers (1).

Today, the Russian fashion market consists of developing brands and manufacturers promoting their own brands in the mass category market, and famous designers working with products prêt-a-porter de luxe. The most famous Russian fashion designers are Slava Zaitsev, Valentin Yudashkin and Tatiana Parfenova, two of which have been around since the days of the USSR. Other designers, such as Igor Chapurin, Denis Simachev, Max Chernitsov, Konstantin Gaidai and Sergei Teplov, are designers supported by the Russian upper classes.

What remains to be seen, however, is if Russia can develop its talent and keep it on home soil.

Yet, there has only been passive interest in these designers from global buyers.  Moreover, the high percentage of Russian-speakers in the European Union has not been translating into additional consumers of Russian fashion. For one, it is well-known in Russia that many people do not consider the upper-class supported designers to be authentic designers at all, but simply the girlfriends and wives of oligarchs. They may be financially secure because of their wealthy connections, but they aren't able to run a company and aggressively push their brand to a global level. Thus, a "market for friends" was formed on par with the domestic market, where most of the buyers and sellers know each other or both are from the upper class. It's an insular cycle that hampers the creativity and growth of Russian fashion brands, slowing its entry into a global market. Local brands need strong management, preferably with professional education and experience that will foster the development of the industry.

Is it possible to attribute such slow state of affairs in the Russian fashion industry to its young age?  Certainly. The majority of Russian designers started their labels between 1998 and 2006. That is why the business schemes, which are successfully operating amongst the fashion markets in Europe, are also barely functioning in Russia. For instance, changes in leadership are not typical for Russian fashion houses.  Igor Chapurin, Alena Akhmadullina, Sergey Teplov and Yelena Yermak are the undisputed leaders of their own clothing lines. This organizational structure strongly inhibits the development of their companies because low business literacy of leadership may interfere. In contrast, the change of leadership - creative directors, in particular - is one of the key components of the on-going success of many European fashion houses.

However, despite its stagnant history, there are clear signs that the Russian fashion market is making a move.

All high-profile designers understand that they need to show their own collections at fashion weeks to promote their lines. Their goal is to establish themselves in the market and to subsequently find quality production and distribution partners. To that end, Russian Fashion Week (RFW) has been a platform for Russian designers for 10 years. This year, however, RFW changed its name to Mercedes-Benz Fashion Week Russia, signifying the first year of RFW's three year partnership with the Mercedes-Benz brand. Undoubtedly, a fashion week under the Mercedes-Benz umbrella will bring a much larger audience to Russia's designers. Currently, Mercedes-Benz Fashion Week Russia is the main event in the Russian fashion industry and is the largest fashion week in Eastern Europe.  The opposite approach is also being taken by certain designers: in 2005, the Russian fashion house Chapurin became the first Russian brand to show a collection at Paris fashion week.

Russian fashion houses and mass-market brands are also increasingly participating in fashion collaborations, and in some cases, working together with global corporations. For example, Denis Simachev has put his signature prints on Apple's iPad and iPhone and on Sony's PlayStation 3.  Designers are becoming more sophisticated in their advertising and marketing initiatives. Designer Alexsander Terexov has many celebrity clients, including Mischa Barton, Kylie Minogue and Natalie Imbruglia. Mass-market brands operating in the Russian market frequently invite famous Russian actors and athletes to help create capsule collections.

What remains to be seen, however, is if Russia can develop its talent and keep it on home soil. According to trendyman.ru, the likelihood for European and American fashion companies to acquire the most successful Russian brands, such as Denis Simachev, Gosha Rubchinsky and Vika Gazinskaya is very high. Nevertheless, Russian fashion is looking forward to major changes within the industry, with a transition towards professional management of fashion houses (which can, for example, deal more effectively with distribution and exporting issues), as well as high-profile mergers and acquisitions to help local brands gain competencies in capitalizing their own markets.


(1) According the results of research by Russian Trends Watch consultancy.

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