How luxury western goods flood stores in Russia three years into sanctions

Despite sweeping Western sanctions and the exodus of major brands following Russia’s military actions in Ukraine, affluent shoppers in Moscow continue to find luxury Western goods in abundance.

In the city’s upscale shopping districts, high-end Russian retailers and department stores are thriving, offering everything from luxury cars and designer clothing to gold jewelry. This reality sharply contrasts with Western predictions of a collapsed Russian economy and complete isolation.

“I don’t see any particular changes,” said Natalia, a 51-year-old dentist browsing the upscale GUM shopping mall near the Kremlin. “Maybe there were three stores – Chanel, Dior, Hermès – that I know have left. All the rest are the same as before. I see even Brunello Cucinelli is here,” she told AFP, referring to the Italian luxury brand.

Many in Moscow, including President Vladimir Putin, mock the perceived ineffectiveness of sanctions. “They wanted to isolate us? Please! We are so isolated here it’s even funny,” scoffed Sergei, a 61-year-old pensioner exiting an exclusive store.

More from Explainers

How ChatGPT is becoming everyone’s BFF and why that’s dangerous This Week in Explainers: How recovering from Gen-Z protests is a Himalayan task for Nepal

Is it “pure hypocrisy”?

The US, EU, and UK banned the export of “luxury goods” to Russia as part of their sanctions. Major brands, including Chanel, Hermès, LVMH, and Kering, voluntarily exited the market early in the conflict.

Yet, nearly three years later, their products still populate shelves in Moscow—a city of 13 million that was once a lucrative market. Sanctioned goods are routed to Russia through intermediaries in regions like Central Asia and the Caucasus.

While official stores remain closed, many brands retain their prime locations, seemingly hoping to return someday. “Their announced departure is pure hypocrisy,” said a French businessman selling luxury goods in Moscow.

“Even though their stores are officially closed, these brands continue to sell their products to Russians via ‘marketplaces’ and dealers,” he told AFP anonymously.

Trade statistics reveal a sharp increase in exports from Western countries to former Soviet states like Kyrgyzstan, Kazakhstan, and Azerbaijan since sanctions began, highlighting the complex supply chain.

Editor’s Picks

1

This Year in War: From West Asia to Russia-Ukraine, how 2024 was marred by conflicts 2

Bashar al-Assad's wife files for divorce, expresses dissatisfaction with her life in Russia: Report

“One way or another, everything is imported,” said Elena, a 38-year-old marketing manager for a luxury lingerie brand, while shopping at TSUM, a prestigious Moscow department store. “It’s a little more complicated, but overall everybody manages,” she told AFP.

A sales assistant there confirmed: “The luxury brands are still here. And so are our regular customers, demand has not dropped.”

Is return inevitable?

TSUM advertises products from brands like Prada, Yves Saint Laurent, and Alexander McQueen—companies that officially exited Russia. The store even claims its prices are “more competitive than in Dubai,” a favorite shopping destination for wealthy Russians amid travel restrictions to Europe.

“In Dubai, sales of luxury goods have exploded,” noted the French businessman.

Russian retailers, meanwhile, have turned to creative procurement strategies, reminiscent of the “buyers” from the 1990s who sourced luxury goods from Europe. These modern buyers now coordinate directly with boutiques abroad, securing everything from jewelry to furniture.

Given the huge demand for luxury Western goods, rich Russians are confident the brands will return. “It’s only a matter of time,” said Andrei, a 52-year-old stylist with elite clientele.

With inputs from AFP