Report from Moscow

Moscow is the most capitalist city in the world. Ironic, but true. The only thing that reminds one of communist times is the metro system, all monumental marble and statues of Chekhov. The rest of the city is a grubby struggle for money, from chic bars to rising crime.

The first thing that strikes the potential shopper in Moscow (as I was last week, there on a three-day business trip) is the Russia premium. Most designer brands in Moscow, St Petersburg and elsewhere add somewhere between 20% and 40% on top of their prices for the Russian market. An Etro suit that costs £600 in London, for example, was priced in Moscow at the equivalent of £780.

It used to be said that a similar premium operated in Tokyo, but that was before a decade of stagflation took some of the oomph out of the retail market. Luxury is still big business in Japan (as evidence by Dunhill’s new flagship store that is part shop, part bar), but it is luxury that everyone aspires to, no matter what their income, and luxury that has adapted itself to a very changed retail market.

Russia is more like Dubai. Although there is nothing like the same premium in the UAE, the shoppers on offer are similarly bifurcated: the only people that go into Moscow’s shopping malls are the ones with lots of money. They don’t use the metro and they don’t carry their own bags. So luxury brands can charge them a premium. They are not cost-conscious shoppers.

There are advantages to be a luxury target. Yes, you pay more, but the shops are bigger and better. The main Etro store, for example, had the only full home furnishings section I have ever seen. You don’t get paisley tea cups and leather-bound photo albums in Milan or Florence. Brands will always prioritise towards people who pay little attention to the price tag.

So despite a few pleasant hours exploring the shops (and a heart-stopping moment when I saw a pair of Artioli shoes for 1000 roubles, only to find out the price was actually in euros) I didn’t end up buying anything. Probably a first for a business trip.

The less said about what most Russians actually wear the better. So to be brief: the ordinary working man strolls out in a 1980s BHS catalogue; the rich oligarch prefers the flashiest white suits he can find. And the less his girlfriend is wearing, the better. Oh dear.