A study by the Fashion Consulting Group firm reveals, the rapid devaluation of Russian ruble may result in clothing and footwear prices going up by 20 per cent in the country. Anna Lebsack-Cleymans, CEO of Fashion Consulting Group said in a statement that retailers will have to raise prices if they don't have production facilities in Russia. Olga Shteinberg, Fashion Consulting Group's press officer stated that an increase in prices will be seen in stores operating in medium and upper-medium segments of the industry. This rise in prices will impact the previous collections of some retailers as well as new collections.
The Russian currency rallied from previous lows in the first half of the year. However, the ruble started to slide again in June this year on the back of low oil prices. The fall of the ruble against the US dollar accelerated in August. Ksenia Ryasova, CEO of the Finnish brand Finn Flare, said that because of the devaluation last month, prices of the autumn collection went up by 15 per cent. Medium and upper-priced segments have been hit hardest by the ruble devaluation.
However, Ryasova added, medium segment stores such as Finn Flare cannot lower the quality of their goods, unlike cheaper retailers do. Doing so, would cause an outflow of customers. Sharp ruble devaluation and a drop in consumer demand over the past year has affected the retail sales in Russia. Falling real incomes and rising prices have forced Russians to slash their spending on clothes.
