Desigual closed its stores in Russia.
The Spanish company will be present in multi-brand shops. Adidas also makes store reductions.
The Spanish fashion company has decided to close all its flagship stores in Russia. Desigual, which once had eight stores in Russia, five of them in Moscow and three in Russian regions, plans to close shortly the three that remained: two of them Moscow, (in Afimall and Metropolis shopping centers) and another store that is in the mall «Galeria» in St. Petersburg.
This information was corroborated by sources «JamilCo» Desigual distributor for Russia. The same sources indicated that the Spanish fashion brand will continue to have a presence in the Russian market, but in multi-brand stores. Today Desigual stores sell discounted expected in a few months and close its last stores.
It is not the first foreign fashion group which closes its doors in Russia, they have done since 2014 New Look, Spirit, River Island, and above all a pioneer foreign brands to operate on Russian territory as Stockmann, a Finnish company that brought Zara to this great Russian market, as we had already discussed in the pages of TheLuxonomist
Adidas also suffers in Russia.
Another European giant like Adidas is suffering the effects of the ruble crisis, the penalties after the war in Ukraine and the general weakening of the Russian economy. The German multinational plan to reach close up to 200 stores in Russia in the upcoming months, although according to its top leaders, the confidence you have in this country remains intact. «We are victims of our own success in Russia. As undisputed market leaders, we have been particularly affected by the economic recession and the deterioration in consumer confidence, »said Adidas CEO Herbert Hainer, who stressed that Russia will remain a growth market in the long term the company.
A sign of the confidence that Adidas in the Russian market is the acquisition of a large logistics center whose value could be around 80 million Euros, a warehouse of 120,000 square meters located about 50 km from the capital. Apart from the mentioned confidence in the Russian potential, Adidas has taken the sharp fall in prices of real estate to buy a whole renting warehouse coming in part. It seems a good strategy for companies that show good cash reserves, the acquisition of real estate that very recently would be prohibitive. The acquisition is one of the largest operations of its kind to have been carried out in Russia this year.
The situation of the Russian economy seemed to improve in mid-April, or at least seemed more controlled inflation and the exchange rate of the ruble seemed to recover, though, thanks to a rebound in oil prices, which was very short to collapse in the last two months. The 24th of August was a black Monday for many global stock markets (including Moscow) and a horrible day for the ruble that was overcome quote 80 RUB / EUR accumulated a fall in August more than 15%. In addition, the recession of the Russian economy has spanned six months, with annualized GDP decline of 4.7% in the second quarter of 2015.
This situation endangers the most positive expectations were retail analysts for the second half of the year, relying on overcome the hump of 42% in physical terms and 19% in monetary terms that sales of clothing and footwear in Russia had experienced in the first half of the year over those of 2014. Let’s wait better times for recovery.