No more Western haute couture? Russian designers say no problem.
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Fred Weir Special correspondent
| Moscow
When Russia invaded Ukraine almost three years ago, sparking a storm of global outrage, most major foreign apparel brands .
That opened up a big opportunity for Russians like fashion designer Ksenia Knyazeva.
She had been toiling in the shadows of the big labels for a decade, and the West鈥檚 implementation of economic punishments upon Russia didn鈥檛 make things any easier. But Ms. Knyazeva, who designs , has scrambled through the international maze created by sanctions in order to source materials; made deals with garment factories in Russia, China, and Turkey; and found innovative ways to promote her name to customers.
Why We Wrote This
A story focused onWestern sanctions were meant to crush Russia鈥檚 economy. But in at least some sectors, Russian entrepreneurs have been able to unleash new creativity and fill the gaps left behind by departing Western brands.
The past three years have seen unprecedented success for Ms. Knyazeva鈥檚 business, as Russian women turn to entrepreneurs like her to dress them in the style they鈥檇 become accustomed to. She鈥檚 opened up four retail outlets in that time and will soon be moving her company headquarters into an upscale Moscow office space.
It may seem counterintuitive. But the still-escalating blizzard of sanctions leveled against Russia in the wake of its invasion of Ukraine and the mostly effective responses of Russian policymakers and private entrepreneurs have not only failed to punish Russia but actually stimulated some sectors of its economy in ways that will probably endure long after the Ukraine war has ended.
The first thing Ms. Knyazeva tells a journalist visiting one of her Moscow shops is that she鈥檚 grateful to those Western companies, which moved into the Russian market in the 1990s, for bringing ideas and expertise that transformed the old Soviet culture of fashion indifference, inculcated modern business methods, set standards of quality, and educated Russian consumers.
鈥淚 didn鈥檛 wish for this situation, but I鈥檓 a Russian who feels patriotic,鈥� she says. 鈥淲hen all those foreign firms departed, it opened up niches that previously seemed unreachable to us. Russian customers were looking for equivalent goods to the ones no longer available, and our task was to provide them.鈥�
Western sanctions vs. Russian creativity
Ms. Knyazeva is a small player that rushed into the vacuum left behind by retailers like H&M, Adidas, and Chanel. But her success is emblematic of a wider process that, through shock and adaptation, transformed Russia鈥檚 already developed consumer economy from one dominated by international brands to a largely Russified one.
Wealthy Russians are still able to obtain high-fashion clothes, jewelry, and other luxury goods, albeit at much higher prices. But for customers on a budget, the disappearance of most Western brands they鈥檇 grown accustomed to seemed to threaten a return to the era of shortages and mediocre products that still lives in the memories of Russians over 40 years old. Russian government policies stabilized the economy, and entrepreneurs like Ms. Knyazeva stepped into the breach.
For most types of relatively low-tech consumer goods, Russian businesses have proved surprisingly adept at developing alternatives, rerouting their supply chains, and providing copycat products of similar quality, though often at higher prices. Over three years of war, that has occurred in most sectors, including cosmetics and toiletries, foodstuffs, furniture, home appliances, and software. Even have reportedly captured 4% of the market, though imports from China still dominate.
Other economic sectors are struggling to replace Western imports on forbidden lists. The Russian government promotes import substitution in a variety of ways, including by subsidizing innovation centers that focus on developing replacements for critical technologies and components. One study found that Russian industry has succeeded in in this way, leaving it reliant on expensive and circuitous methods of 鈥減arallel import鈥� to obtain needed tools and parts.
But the architects of Western sanctions appear to have greatly underestimated the power and creativity of Russian market forces to withstand and even benefit from the sudden withdrawal of foreign corporations, says Oleg Buklemishev, an economist with Moscow State University.
Russia has long since thrown off the shackles of Soviet central planning, its consumer economy has been developing on market principles for decades, and the Kremlin has been working, with some success, to sanctions-proof the macroeconomy since 2014, when conflict with the West began to look irreversible.
It鈥檚 hard to guess how deeply sanctions have impacted Russia鈥檚 military industry, which is their main intended target. That鈥檚 mainly due to wartime secrecy and disinformation. But Mr. Buklemishev says war production lies outside any normal economic rules. 鈥淚f they need something for the military, they will find a way to obtain or produce it,鈥� he says. 鈥淐ost is no object.鈥�
But in sophisticated civilian industries such as the energy sector, automobiles, and aircraft 鈥� where commercial viability is a must 鈥� substituting vital Western imports and expertise has proved slow, and bottlenecks have formed that may last for years. Russia鈥檚 domestic car industry has struggled to produce components such as airbags and power brakes, leaving it stuck serving the low end of the lucrative Russian auto market. Chinese companies have taken over assembly plants vacated by Western automakers, and those more upscale cars are increasingly visible on Russian roads.
In many cases, Russian businesses have been temporarily boosted by the opportunity to acquire the assets of departing Western firms at fire-sale prices. That windfall may have been , leading some commentators to liken it to the mass sell-off of former Soviet state assets following the collapse of the USSR that created a class of instant billionaires.
鈥淟ook at me鈥�
But no such bonanza befell Ms. Knyazeva or most of the new Russian fashion entrepreneurs.
鈥淚 studied Western haute couture and dreamed of making clothing on that level, available to the average Russian woman at affordable prices,鈥� she says. 鈥淭hat鈥檚 what I鈥檓 still working to do.鈥�
Ms. Knyazeva says the departure of Western firms has been accompanied by a mood change on the part of Russian consumers, who formerly preferred foreign products, which they assumed to be superior.
鈥淚 have a half-million followers on my YouTube channel, and I鈥檝e received many comments from people who say they are offended that all those companies just left us. Even if they returned tomorrow, people might not want their products,鈥� she says.
The attitude shift, at least in the realm of fashion, is potentially seismic, agrees , former editor of Vogue Russia and a major fashion influencer in the country.
鈥淟ook at me,鈥� she says. 鈥淚 love wearing and mixing Russian designers with overseas fashion, especially those who provide excellent quality and style.鈥�
