Western brands are increasingly withdrawing from the Russian market, while local brands are reportedly expanding their presence.
Helly Hansen joins a long list of Western companies that have severed ties with the Russian market by selling its business to top local managers. Russian newspaper Vedomosti believes the value of the deal is symbolic. Helly Hansen operated 48 stores in Russia, some of which were franchises. Igor Roganovich, one of Helly Hansen’s former top managers in Russia, said that six stores across the country continue to sell the leftover merchandise. It is expected that these stocks will last for another two to three months.
In the future, the new owners plan to relaunch the retail chain under the new name Move. The first two Move stores are to be opened in Moscow shopping centers. In 2023, the company plans to expand the new chain by ten doors. Roganovich said the retail chain would carry several brands and sell Western brands such as Nike, Adidas, Puma, Mont, Kronos, Geox and Under Armour. Vedomosti quoted local analysts saying that the main challenges for the new owners are to ensure product supply and maintain consumer interest in the face of declining demand in the sporting goods market.
In 2022, the purchasing power of the Russian population dropped by 3.5 percent, forcing 70 percent of Russian shoppers to adjust their budgets downward for fashion items, according to research conducted by NielsenIQ. Against this backdrop, Russia’s largest online retailers point to a steady increase in demand for Russian-made sporting goods. Wildberries estimates that the supply of products from Russian sports brands on its marketplace has tripled since the beginning of the year. Ozon also confirmed the increasing presence of Russian brands in sales, including Zasport, Forward, Demix and Termit.
On the other hand, some Russian brands have shifted their focus to manufacturing military clothing and equipment for Russian conscripts during the partial mobilization. For example, Rey, a sports and outdoor goods manufacturer based in Yekaterinburg, has ramped up production of balaclavas and begun manufacturing military pouches. The company estimates that demand for balaclavas in the Russian market has increased 100-fold due to mobilization.
