Russian shopping centers may replace Western brands with Turkish and Chinese ones
Russian shopping centers are ready to replace American and European brands with Turkish and Chinese ones. The president of the Union of Shopping Centers, Bulat Shakirov, shared this information with Russian newspaper "Izvestia". A representative of the Union has already left for Turkey for negotiations aiming to attract more than 200 trademarks in development. In the meantime, the union's specialists may also go to China.
Following the Russian war in Ukraine, the worst case scenario for shopping centers will be a 30-40 percent vacancy rate. This leaves massive amounts of retail space needing to be filled.
Exactly how the replacement process will take place is still unclear.
H&M, Mango, IKEA and more have already announced the suspension of their business in the country. However, these companies have not informed individual shopping centers that they will vacate the leased premises.
Domestic fashion companies are also reviewing their own plans and are investigating opening new locations, among them being Detsky Mir, Sportmaster and Gloria Jeans.
DNA Realty CEO Anton Belykh is convinced that foreign brands do not plan to leave Russia completely. In his opinion, we are talking about merely a suspension of their business. Brands evaluate how much it will be possible to maintain supply chains and uninterrupted supply goods, as well as how prices and purchasing power will change.
By leaving the Russian market, foreign retailers lose a lot. According to Forbes, in 2021 the turnover of the Russian fashion market has grown to 2.69 trillion rubles. 67 percent of this turnover accounted for the sale of clothing. The exact number of international brands in Russian experts could not even count. Another factor to consider is that many companies operate in Russia on a franchise basis, some operate as joint ventures enterprises with Russian capital.
This article was originally written in Russian, translated and edited to English by Kelly Press.