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After the decision of several large luxury groups to close their stores in Russia, the European Union decides a new sanction concerning the export of luxury products.
In Russia, the share of sales of luxury houses is rather modest, 2% for LVMH last year or 1% for Kering to name but two. The impact of the European Union’s decision to stop exporting luxury goods to Russia in the face of the war in Ukraine should therefore not have too much impact on the major groups. But some French or Italian luxury brands will see a drop in their revenues.
However, this low percentage of sales is explained by the fact that wealthy Russian clients make their purchases all over the world and in particular in Paris or on the French Riviera, where they own properties. Since they can no longer travel, luxury sales abroad will inevitably decline.
After the EU summit in Versailles, Emmanuel Macron declared that “if things continue on the military level, we will take new sanctions, including massive sanctions“.
In a statement, Ursula von der Leyen, the president of the European Commission, announced a ban on imports of luxury goods to Russia. “Those who support Putin’s war machine should no longer be able to enjoy their lavish lifestyles while bombs fall on innocent people in Ukraine.”
Western sanctions are having a big impact on the Russian economy, which is experiencing unprecedented contraction, rising inflation and a drastic reduction in purchasing power. But both the EU and the US want to hit the Russian oligarchy in the heart, with measures such as freezing the assets of those close to power.
The administration of US President Joe Biden has taken the same step. Gina Raimondo, the U.S. Secretary of Commerce, explained that the United States will not allow Vladimir Putin “and his friends to continue to live in opulence while causing enormous suffering throughout Eastern Europe.”
Read also > WHAT IS THE LUXURY MARKET IN RUSSIA ?
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After the decision of several large luxury groups to close their stores in Russia, the European Union decides a new sanction concerning the export of luxury products.
In Russia, the share of sales of luxury houses is rather modest, 2% for LVMH last year or 1% for Kering to name but two. The impact of the European Union’s decision to stop exporting luxury goods to Russia in the face of the war in Ukraine should therefore not have too much impact on the major groups. But some French or Italian luxury brands will see a drop in their revenues.
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After the decision of several large luxury groups to close their stores in Russia, the European Union decides a new sanction concerning the export of luxury products.
In Russia, the share of sales of luxury houses is rather modest, 2% for LVMH last year or 1% for Kering to name but two. The impact of the European Union’s decision to stop exporting luxury goods to Russia in the face of the war in Ukraine should therefore not have too much impact on the major groups. But some French or Italian luxury brands will see a drop in their revenues.
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