Vedomosti
Crisis over as luxury goods boom
Luxury goods producers and retailers celebrate the end of the economic downturn as this year’s winter holiday season is expected to see record high annual sales of 170 billion euros.
The upcoming Christmas sales season is expected to see record trade in brand-name handbags, clothing, perfume, and other luxury items, says a survey by the U.S. consulting company Bain & Co. Even a 10% increase in sales during the winter holiday season will push global sales of luxury goods for 2010 over the 170 billion euro mark ($237 billion). A more pessimistic scenario, according to the same survey, will see sales for 2010 totaling 167 billion euros if the holiday season fails to generate more than a 2% sales increase.
Worldwide sales of luxury goods plummeted to 153 billion euros in 2009, an 8% decrease on 2008, and the lowest figure on record. But “the market has been recovering faster than expected,” says Claudia D'arpicio, head of fashion and luxury for Bain & Co in Milan. This season’s collections might sell out at full price and the holiday sales season could even see stock shortages, the fashion industry expert says.
World luxury industry leaders have been posting good results recently. France’s Moet Hennessy Louis Vuitton (LVMH) recorded a 19% increase in sales on the same period last year for brands including Louis Vuitton, Givenchy, Guerlain, Kenzo, Chaumet, Moet & Chandon, Hennessy and TAG Heuer, that totaled 14.21 billion euros.
The Christian Dior Group also noted a 19% growth, with sales totaling 14.8 billion euros. Tiffany’s sales in the first six month of the year totaled $1.3 billion giving them an increase of 15%. Inspired by the robust growth witnessed across the industry, Prada announced its plan to hold an IPO. China Daily reports the Italian company could float on the Hong Kong Stock Exchange as early as 2011.
The Bain & Co survey does not mention Russia, but Russian industry experts polled by Vedomosti confirmed the global trend has also touched Russia. “Sales for 2010 are set to hit pre-crisis levels,” Crocus Group Commercial Director Emin Agalarov believes, adding: “Sales have already increased by between 15% and 20% in footwear and accessories, and by between 12% and 15% in clothing.”
“Sales have increased 20% across our product range,” says Lyudmila Malofeyeva, vice president of a Swiss watch and jewelry store chain. Alexei Bogdanov, CEO of Russian jewelry watch producer Nika, said his company “has significantly expanded its range of luxury watch models” to meet this increased demand, and released a line of limited edition watches with prices starting at 500,000 rubles.
Last year was disastrous for the industry as sales plummeted by up to 40% in some market segments, Agalarov noted, adding: “The downturn is over now, and this renewed demand has sparked renewed supply: the newly opened Vegas shopping mall is packed day in, day out.”
RBC Daily
Russia: More than just caviar and vodka
Foreign investors propose roadmap for Russia’s modernization
Russia could become an exporter in the knowledge economy 10-15 years from now provided it cuts state bureaucracy 75%, harmonizes national laws with European legislation and, most importantly, convinces the world that business in Russia is done by the book, says a recent report by the Foreign Investment Advisory Council.
Prime Minister Vladimir Putin on Monday chaired an annual meeting of the Foreign Investment Advisory Council (FIAC), a consultative body involving CEOs from 42 international companies and banks, which exists to promote a favorable investment climate in Russia drawing on global expertise and international companies’ experience of operating in the country. Putin mentioned that the companies involved in the council have invested almost $100 billion in Russia.
The participants were enthusiastic about expanding partnership and cooperation with Russia, even though a recent FIAC review of Russia’s modernization efforts was less than optimistic. It indicated the international investment community still doubts the Russian government’s determination to modernize the economy, reign in excessive bureaucracy, protect intellectual property rights and strengthen the rule of law.
According to FIAC experts, Russia does not need to rival economies specializing in cheap outsourcing or production such as India or China, as that is no way to boost either FDI or revenues.
Russia does have a solid R&D inheritance from the Soviet era, and should therefore aim to become first a major partner in international high-tech projects, and in the long term, an exporter of intellectual products and services to the United States and Europe.
Time is running out, however, and Russia’s R&D companies are lethargic and lacking in market sense. Scientists are ill-versed in commercializing their developments. Curiously, foreign investors say that the internal demand for innovations is also inhibited by the Russians’ own lack of confidence in domestic products. Russians only buy locally produced vodka and caviar, they observed.
National laws need to be brought into line with European legislation. Moreover, the international community needs to be convinced that the law will be always observed. Currently counterfeit Microsoft software is on sale even right in the center of Moscow.
Foreigners view Russia as a country closed to business due to its complicated visa and certification procedures and labyrinthine taxation system. It is more profitable to import end products than components. Those surveyed also said that the country’s bureaucracy could easily survive savage cuts of 75%.
The report’s authors also highlight the need for government to simplify the rules for the registration, financing and management of new businesses. Today people capable of setting up successful startups are discouraged by the mountain of confusing application forms that have to be completed.
It is also essential to explain the social benefits of modernization to the public; making good on all commitments is no less important, the FIAC report says.
Rossiiskaya Gazeta
Census in space
There is no escape from Russia’s census. Astronauts Oleg Skripochka, Alexander Kaleri and Fyodor Yurchikhin, currently orbiting Earth in the International Space Station, took time out of their space mission to answer the census-taker’s questions on Monday.
Irina Zbarskaya, head of the Federal State Statistics Service's Population and Health Statistics Department, asked the questions. This is the second time she has taken a census in space.
Back on Earth, the same questions are being put to as many of Russia’s 142-million-strong population as the census-takers can reach.
This may be the first time in eight years that a Russian space crew has taken part in a nation-wide census, but for astronaut Fyodor Yurchikhin it is nothing new. It is already his second time. That is something of a record, and not one that anyone is likely to beat in the next ten years, according to the Deputy Director of Russia’s Statistics Service (Rosstat) Maxim Dianov.
Russia is the only country that includes astronauts in its national population census. Census laws state that relatives of those travelling on assignment can answer census-related questions for them.
Taking the census into space also boosts its popularity on Earth.
The United States seems to like this idea, even though their orbital crew was not included in their recent census. At first NASA suggested that the Russian crew retreat to Russian territory, the Soyuz spacecraft, to take the census, but a compromise was eventually reached.
Despite the delay on the line because of the great distance involved, Kaleri and Skripochka managed to answer all the census-taker’s questions. When asked whether they knew Russian, they answered, joking: “Kind of.”
All three Russian astronauts have university degrees. Yurchikhin even has a PhD in Economics. Unlike his colleagues, in addition to Russian and English, he also speaks Greek.
On Tuesday, the Russian crew will fill out census forms recently delivered to the space station. The forms will go on to be displayed at the Russia’s Statistics Service's museum.
Zbarskaya said that most Russians have proved quite keen to take part in the census, although she added that they tend to prefer to answer questions at census stations, rather than letting student census-takers into their homes.
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MOSCOW, October 19 (RIA Novosti)
