The Mercury group, Russia trading in clothing, footwear, jewelry, watches and other goods under the brands Dolce & Gabbana, Roberto Cavalli, Giorgio Armani, Burberry, Bvlgari, intends to reduce prices in their stores by 10-25%, informs “Kommersant”. The company noted that the prices of luxury goods in Russia should be compared with prices in Western Europe and to attract into showrooms Mercury new customers.
“The main goal is to increase market share through new customers who preferred to buy things in Paris and Milan, citing lower prices, now it will disappear,” — said Vice-President of Mercury Alexander Pavlov.
On Thursday at a press conference in Moscow, Pavlov explained that the price reduction has become possible due to the fact that most companies are working with Mercury, canceled “Russian price list” in which the purchase price was sometimes 30% higher than in Europe”. According to him, the renunciation of price increases in early 2016 has already increased the number of clients by 12%, a fall in prices could increase another 20-30%.
However, the General Director Fashion Consulting Group Anna Lebsak-Kleimans doubt that the discounts will help to significantly increase the number of buyers of luxury goods.
“There are two types of Suite: the highest and the second echelon. In the first case, the rpm ensure consistently rich people, their income is in foreign currency, and demand, respectively, nothing happens. 50% of consumers in the latter case, highly paid professionals, whose expenses are in rubles on clothing has declined during the crisis by 20-40%; accordingly, the discount of 10-20% won’t make a difference,” she explains.
Previously, the Ministry had informed that due to continuous reduction of income (according to Rosstat, real income of the average Russian for 2015 fell 4%, and real wages — by 9.5%), the Russians moved into the savings model of consumption, dramatically reducing spending on luxury items. According to international research company Nielsen, in the fourth quarter of 2015, the percentage of respondents who switched to a life in economy mode, it reached 71%.
According to Y Consulting, only for January—September 2015 the demand for luxury goods in Russia fell in real terms by 14.6%. The drop in sales led to the closure of about a quarter of multi-brand boutiques in the luxury and premium segments.
Another reason for the falling demand on luxury goods imported experts call the decline of the ruble. Previously the Director for analysis of financial markets and macroeconomics UK “Alfa-Capital” Vladimir Bragin has declared that the fall of the ruble will adversely affect the business of manufacturers and suppliers of luxury goods and goods of the premium segment.
At the end of 2015 the Prime Minister of Russia Dmitry Medvedev urged to limit the procurement of luxury goods by state owned companies. According to him, the government will instruct its representatives in the boards of Directors to develop appropriate internal documents.
The Mercury group is one of Russia’s largest dealers of luxury goods, the stores of the company operate in Moscow and Moscow suburbs, St.-Petersburg, Sochi, Krasnodar and Yekaterinburg.