Retail space of the Russian market of brassières, day- and night underwear, homewear and swimwear doubled in size between spring 2005 and spring 2008, covering close to 82.000 square meters.
This is a result of the latest edition of the market research study, assessed by ITMM GmbH, Stuttgart, and published by Igedo Company, organisers of the specialised lingerie trade fairs BODY LOOK, Düsseldorf, and CPM LINGERIE, Moscow.
Whereas in 2005, the share of Moscow against the total Russian retail space of lingerie accounted for around 70 per cent, the study projects a decline of the Muscovite share to some 40 per cent, this year.
Obviously, the transformation of growth from Moscow to the provinces concentrated on thirteen regional capitals, composing a population of close to or well over 1 mn, as well as on further nine large cities with in between 400.000 and 900.000 inhabitants.
According to the study, 48 per cent against the Russian total retail space offering lingerie is allocated to 22 such cities in the regions.
The final balance of 12 per cent is shared by further 41 medium-to-larger sized provincial cities which the study characterises as growth oriented retail locations for lingerie.
As the study further assessed, the Russian lingerie retail trade composing an approximate total number of 1.800 specialist stores in spring 2008, reached revenues of US $ 2,5 bn (Euro 1,6 bn) against US $ 1,26 bn in 2005, generated by around 900 doors.
There are three main reasons given in the study for the tremendous deepening and widening of the Russian lingerie retail market:
1. Growth of Real Income
As a result of increase of wages and salaries at an annual average rate of 12,8 per cent over the past years, Russia has seen and continues to observe a surge of a money spending middle class.
2. Mushrooming Points of Sale for Lingerie
The enormous expansion of specialised lingerie retail chains and shops is the result of billion heavy investments in the construction of 545 shopping centres as of against 316 of such centres in 2005. Without this significant growth of 72 per cent, allocation of lingerie retail shops would have been impossible.
3. Diversification of the Offer
Russian retailers of intimate apparel have paid keen attention to diversify their portfolio in terms of fashion, function, target group orientation and wearing occasion. Preparedness to take a risk in opening specialized shops dedicated to just men's underwear, large sized intimate apparel or petites as well as to homewear, or swim- and beachwear is noteworthy and tends to sustain.
New speciality shops and affiliated chains in Russia like "VI Legion" or "XO" for men's underwear, "Bikini", "Bikini Boom" or "Jemini", focusing on swimwear in Samara may be taken as examples for this obvious trend.
The new edition of Igedo's Study offers a deep insight view on the most recent development of almost any significant Russian retailer in terms of its company profile and expansion of retail activities.
The analysis refers to all key specialized lingerie retail chains, including both, multi-brand multiples as well as mono-brand multiples such as larger-to-medium sized independent lingerie stores and boutiques located in Moscow, St. Petersburg and further twelve large regional capitals.
The Study further features allocation of the new vertical mono-brand lingerie chain "Défilé", recently launched by Wild Orchid Holding in provincial cities as well as the large sized multi-brand lingerie and hosiery store concept invented by the Muscovite import distributor Edinaya Evropa Elite under the trade mark of "Style Park".
Regional Retail Chains Springing up:
The new study also sets a focus on identification of regionally operating independent multi-brand lingerie chains, like, for example, "Le Pantalon", Volgograd, "Parizhanka", Samara, "Magia", "Corset", "Lu-Lu" in Nishnij- Novgorod, "Bon Dimanche", Novosibirsk or "Golfstream" in St. Petersburg.
As far as wholesale distribution of lingerie in Russia is concerned, the study describes the most common patterns of sales mediation in relationship between foreign suppliers and the retail trade.
Forty import distributors and wholesalers are identified specializing in lingerie, based in Moscow and the Regions. The study concludes that such import distributors still play the most important role steering the supply chain in the medium-to-upper-medium priced market segment.
However, as the study also says, the ongoing verticalisation of the lingerie market in Russia puts pressure on import distributors. To save their margins, many of such wholesalers have started to build their own multi-brand lingerie chains and to multiply their concepts to provincial cities.
Survival of the traditional wholesale dealerships in Russia is put at risk, because more and more of the market leaders, offering complete and fully diversified lingerie ranges, like, for instance, Triumph International, have started operating their own Russian distribution subsidiaries, incorporating stock supply facilities from which retailers are served, but directly.
In parallel, Triumph International keeps introducing retail space management systems to its customership under franchising schemes, or stores under own management are being multiplied at provincial shopping centres.
Further Growth expected at 20 per Cent annually:
According to insiders like Alexander Fedorov, president of Wild Orchid Holding, the uncontested key player of the lingerie retail trade in Russia, the Russian lingerie market will continue to grow at an average annual rate of 20 per cent until 2011.
This projection is suggested to apply to the medium-to-upper-medium priced market segment, in particular, driven by provincial demand. Instead, lingerie belonging to the premium-to-luxury segment is said to increase at much lower rates, averaging 7 per cent, similar to its growth over the past two years.
As it is further assessed in the new study, exports of men's underwear from the Western member states of the European Union (EU-15) increased at 25 per cent in 2007 against 2006, equivalent to a purchasing value at ex-works terms of Euro 38 mn.
Intimate apparel for female consumption saw rising sales to Russia last year at a rate of 9 percent, representing a purchasing value of Euro 200 mn.
CPM LINGERIE: Gateway to the Russian Lingerie Market According to Frank Hartmann, Managing Director of Igedo Company, the majority of European lingerie and underwear suppliers keep depending on orders from a few or just one single Russian lingerie chain and do not show active initiative to participate in the fast deepening and widening market prospects offered by regionally operating chains or independent retailers connected to import distributors and wholesalers.
"There is obviously something going wrong with suppliers not retailing their collections in at least 64 Russian cities", said Hartmann. "Igedo Company offers the lingerie industry twice a year a strong performing showcase on the basis of which successful entries in the Russian lingerie market result".
Hartmann also confirmed that Igedo has reserved the right for all exhibitors, participating in the next two consecutive editions of CPM LINGERIE in September 2008 and February 2009 to receive a free copy of the new study.
This consists of a text section comprising 138 pages, together with a vast database in Excel format, listing selected lingerie retailers, key importers and wholesalers on 74 pages.
