With the recession heading into its second year, most Russians are cutting back. Not Yaroslav Gafurov. The 25-year-old Muscovite said now is the perfect time to stock up on his favorite toys -- luxury cars and expensive watches.
He spent the ruble equivalent of about $1 million on new autos in the last year, snapping up a $250,000 Rolls-Royce and a pair of Bentleys, one of which is still on order, as well as a top-of-the-line Mercedes and BMW, he said. Another 70,000 euros went for watches, he said.
“The crisis hasn’t affected my daily consumption or my vacation habits at all,” said Gafurov. He said his corporate-law practice has taken off as the pain of the economic crisis has deepened for Russian companies.
Conspicuous consumers like Gafurov helped some luxury brands report their best-ever results in Russia in 2015, even as overall retail sales dropped 10 percent. About half of Russians can barely afford purchases beyond food and other basics, according to national polls.
Some global luxury brands are betting the trend will continue, opening new shops across the Russian capital. GUM, the ornate department store across Red square from the Kremlin, saw Bulgari and Jimmy Choo boutiques open late last year, while Hermes doubled its selling space, according to a GUM spokeswoman.
“Sales are up not only in rubles but in hard currency,” said Alexander Pavlov, vice president at Mercury, Russia’s largest luxury retailer and operator of TsUM, Moscow’s main high-end department store. Some rich buyers have cut back on trips to Europe and are doing more of their shopping at home, according Moscow’s Fashion Consulting Group.
Prada said Russian sales last year “registered significant growth.” Russia was the strongest market in mainland Europe for Rolls-Royce, the company said.
Helping drive the growth is a sharpening polarization between the very rich and the expanding ranks of the poor -- government data showed about 4 million fell below the poverty line in the first nine months of last year. Those lucky enough to have spare rubles often don’t have many attractive options.