Moscow: Out With The Casinos, In With New Shops

Sometimes the things you learn during fashion week have nothing to do with fashion week. In Milan I met retail-guru Vittorio Radiche for lunch at La Rinascente, the department store he's currently revamping, and he brought along a friend, Nick Hill, a retail consultant with whom he had worked on Tsum department store in Moscow. Nick is still in Moscow now working for the Korston Group. The owners of Korston hail from the hotel business, but are focusing new energies on the Korston Mall and department store division. Currently, there are 10 Korston stores under construction and a new store in Kazan has just launched.

Hill said that one of the side-effects of Putin banning gambling in the big cities, was that a lot of prime real estate would be available for retail stores. Some casinos had opened as recently as the beginning of last year, so are in top condition. Bloomberg recently reported that one Russian casino group, Storm, was considering new locations in Armenia and Costa Rica.

But opening department stores in Russia is no easy task. Most of the top international brands signed exclusive agreements with Russian groups like Mercury who own Tsum and brought over all the major watch brands before moving onto fashion labels like Prada, Gucci, Roberto Cavalli, Ralph Lauren to name but a few. Even brands that signed with smaller partners -- brands like Manolo Blahnik and Jimmy Choo ,which are pet projects of rich Moscow wives -- signed exclusively. So although they only have one shop in Moscow, they're unable to sell to anyone else.

Hill says he tries to get around this by offering to buy merchandise from the European distribution centers for the brands, but not many want to risk annoying their partners. Particularly at a time when Russia is one of the few bright spots on the global luxury market. Nevertheless, his website boasts collections by Cavalli and Zegna, two of the Mercury brands. The key question now is when will the brands want to go out on their own in Russia. It's said that Chanel may be the first. But getting anything done in Russia is still not an easy task. Unless you know the ropes like the old hands.

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