Business mysteries

I’ve recently done some research about brand stores in Moscow and it is crazy how this business sphere lives out here. I am not sure what is going on in the world but fashion and business is definitely a weird combo.

Of course, we all know, there isn’t such a word as sale for luxury brands like LV, Brioni, Gucci and many others. They sell every single item of each new collection? Pretty doubtful, right? Well, there are three big companies that own all the high-end boutiques in Moscow, and also have department stores, where the stuff is mixed together. Mercury means total luxury – Mr. Fridlyand and Mr Strunin founded their company in 1994 and since then they’ve been exclusive dealers of Rolex, Tiffany’s and a lot of wonderful car brands like Lamborghini, Bentley and  Maseratti.  Bosco di Ciliegi works with less expensive brands (D&G, Emporio Armani, Jean Paul Gaultier, Moschino, Casadei). Djamil ko’s owner from what I’ve heard is a a very expressive and greedy person (even thou his is a millionaire). He deals with Hermes, Christian Dior, Yohji Yamamoto etc.

First of all, all unsold items (50-70%) are sent to huge stocks where (if you are close enough to the owner) you can buy stuff with a 95% discount and then just destroyed. All beautiful designer dresses and purses aew burnt and torn cause they weren't sold for their regular price! It’s also almost impossible to import clothes, shoes and accessories legally. The fees and taxes are so high that the items become priceless after the customs. The price already doubles, not even talking about other expenses – salaries, rent, ads. So pretty much all three of Russian Fashion Monsters are using different schemes to pay less and earn more. For instance, according to the documents, no clothes are being imported but fabrique, second-hand items or even tights and socks for charity organizations. Crazy, isn’t it? Another “option” is to deal with offshores and import luxury goods thru the third country/organization. The cost of a D&G dress is $15 in covering documents. 15! Can you imagine that? The Chanel purse is $12. You understand how much it lowers the customs fees – quite enough to help minimizing expenses no matter if it’s legal or not.

I’ve read enough to understand that fashion business is a business first of all. No matter what you sell – gas, stationery or brand purses, you have fees and taxes due. You have to import goods, paying as little as you can. You have people working in your stores and contracts and many more economic details that make fashion an industry like any other, a little cooler but money-oriented as well.  Will we still love our favorite designers and their creative ideas and outfits they present? Yep.