Luxury goods step up despite economic downturn
The head of Estee Lauder says Russian sales are soaring, despite the financial crisis. Some economists expected consumers to go downmarket, but Moscow's top fashion retailer says there's a flight to quality.
Bosco di Ciliegi is exclusive distributor for products from Olympic tracksuits to elite watches, and runs central shopping mall 'GUM'. Its CEO, Mikhail Kusnirovich says top-end brands are holding up.
“The first three months of year 2009 with respect to 2008 we were even four per cent up, and even better in April. We go better with the brands who have a very strong product, like Max Mara, or like Etro, or like Moschino.”
Estee Lauder's son Leonard, the Chairman of Estee Lauder, coined the term 'Lipstick Index' to explain why its sales soar in a downturn. Russia is the firm's fastest-growing market, even if Russian men are resisting the global boom in male grooming.
“Our business in Russia for all our brands is up 50 per cent in March and the year to date. Nothing is down, everything is up, up, up. Why? Because, in difficult times, women turn to cosmetics, beauty and quality. The Russian male is still very macho, very masculine , and it's hard to really determine where they're going to come out.”
On a bleak global outlook for elite products, Russia's a silver lining. The Luxury Goods Worldwide Market study by researchers Bain sees sales to June this year crashing 20%.