Source: McKinsey

Mass Exodus of Luxury Brands from Russia, as Britain Bans Exports

In fresh economic sanctions, Britain will block the exportation of high-end luxury goods to Russia, as well as impose a 35 per cent import tariff on certain goods including Vodka.

Backed with support by top luxury brands, Chanel, Louis Vuitton, Burberry, Aston Martin and Jaguar Land Rover had already voluntarily ceased business in Russia, with other brands quickly following suit. In a statement released on Linked-In, representatives from Chanel voiced their growing concerns about the safety of their employees.

Given our increasing concerns about the current situation, the growing uncertainty and the complexity to operate, Chanel decided to temporarily pause its business in Russia. We will no longer deliver into Russia, we will close our boutiques and we already suspended our e-commerce.

Chanel

Russia remains a leading country in the importation of luxury goods. Last year alone, British firms sold an estimated £2.6 billion (A$4.678 billion) worth of high-end commodities to the country.

In a statement from the government, the ban is an attempt to restrict the consumption of goods by members of the Russian elite and oligarchs.

The export ban will come into force shortly and will make sure oligarchs and other members of the elite, who have grown rich under President Putin’s reign and support his illegal invasion, are deprived of access to luxury goods.

UK Government

As part of a retail boom following the decades after the Soviet Union, high-end fashion and luxury goods became a staple of culture amongst the affluent and wealthy elite in Russia.

In 2003, Burberry opened their first 5,000 square feet store in Moscow, while Louis Vitton established a free-standing store on Moscow’s Stoleshnikov Lane.

In 2019, Burberry celebrated the establishment of a new flagship store in Gum, Russia. The celebration amassed over 300 guests and included DJs and the latest 2019 Autumn/Winter Burberry collection.

We are incredibly excited to celebrate the launch of our new flagship store in GUM, Moscow. Overlooking the iconic Red Square, the store is the latest expression of the Burberry in-store experience. Russia is an important market for Burberry and we are looking forward to welcoming customers to our new location.

Marco Gentile, President EMEIA, Burberry
A Russian Burberry Store, now subject to close | Source: Forbes.

The increasing risks of trade to Russia have begun to heavily impact the luxury sector, with a mass of conglomerates shutting their doors indefinitely.

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