Moscow has an impressive luxury brand offer, but in these straitened times it is the mid-market retailers such as Karen Millen that are really taking flight, so is the time right for more mid-market UK retailers to start a Russian love affair?
Visiting Moscow last week, for a conference on department store retailing, organised by Zurich-based IGDS, it was hard not to be struck by what was going on beyond the confines of the hyper-luxurious department store-cum-shopping mall GUM, which was where the event was taking place. GUM (the name is a Russian acronym for General Universal Store) dominates one side of Red Square and has to be one of the world’s most impressive settings for a luxury goods emporium.
It has undergone something of a transformation over the past couple of years, with heavy refurbishment being the order of the day as its management seeks to capitalise on the Russian love of all things branded. Mid-week and it was relatively busy, although whether the people inspecting its 300 or so stores were shoppers rather than browsers is a moot point.
What was rather more notable, however, was the underground shopping centre that lies just beyond one of the gates that provides access to Red Square. This is a three-level subterranean destination for central Moscow shoppers and what is interesting about it is how little of what is on sale could be termed luxury. Instead, this is the home of the mid-market and here people really were reaching for the roubles.
One of the attendees at the conference was the international director for Karen Millen, which has a unit within this shopping centre. He confided that with just 15 stores in the Moscow area, the brand is presently taking more money than all of the shops inside the M25 in the UK. This might not sound that remarkable until it is considered that if you include the branches in Bluewater and Lakeside, Karen Millen has more than 25 stores in the London area and almost all of them are in prime locations.
And walking around two of the Muscovite shops, it was striking how similar they were to the home country – with almost no changes having been made from the environments offered to British shoppers.
This would seem to point towards two pretty obvious facts. As a brand, Karen Millen, which is not without a certain bling quotient, is bang on target for aspirational Russian shoppers. And as the newly cash-strapped Russian shoppers begin to turn away from the very top-end brands, it might be a good time to for UK retailers who have the funds to do so, to effect a market entrance.
Contrary to many reports, Moscow’s shoppers have not stopped spending. They’re just being a little more careful about how the cash is distributed and this remains one of the few places in Europe where mid-market store environments and products are generally under-supplied.