Russian middle classes are panic buying luxury goods, presenting brands with a dilemma: ethics or profits?
telegraph.co.ukA post shared by Vena Brykalin (@venabrykalin)Chanel, which also closed its stores late on Friday, faced a similar backlash in the days before it made the decision, not least because it called the invasion a “conflict” when it said it would donate €2 million to refugee relief.
Instagram users immediately demanded that the brand - which employs 320 people in Russia and has five boutiques in Moscow and St Petersburg - stop selling goods in the territory.
Notably, luxury brands kept their stores open long after mid-range international brands shut down their Russian operations. Danish label Ganni, and Hungarian company Nanushka, as well as major companies like H&M, Nike, ASOS and John Lewis, stopped selling in Russia from the beginning and middle of last week.
Certain analysts think this delay from the high-end of the market was about more than just making money before the rouble crashes – particularly since Morgan Stanley estimates that Russia nationals account for less than 2 percent of Kering and Richemont worldwide sales, including Russian spending abroad.“I think the cost is primarily image related,” says Bernstein analyst Luca Scola. “Chinese social media users are criticising Western brands for abandoning the [Russian] market, and the Chinese market – contrary to the Russian one – is material. [Shutting stores] makes them look good in terms of the Western public opinion.
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