High Jewelry Capitals - Moscow

September 2008


The Russian retail revolution

Brimming with rubles, the wealthiest few in Moscow are changing the global luxury game

If you’re a luxury goods marketer, Moscow is the epicenter of the new world order. Nothing is too rare, too blinged-out or too expensive for Muscovites who seek to impress, and the jewelry industry is jumping through hoops to help them do so. Little wonder that at BaselWorld, the exhibitors in the elite precincts of the branded jewelry hall couldn’t stop fawning over their Russian visitors, a cooler-than-thou cadre of buyers who seemed nonplussed at the prospect of plunking down millions for the latest and most exclusive jewelry creations. Due to Russia’s complicated bureaucracy (forms filled out in triplicate, documents stamped just so), international designers and brands eager to get a toehold in Moscow’s thriving luxury scene almost always have to work with a local luxury group. As retail pioneers in the dodgy, crime-plagued years of the 1990s, when the Soviet system fell apart and only the most ruthless oligarchs survived, the all-powerful Mercury Group is chief among them. The retailer-distributor is behind such illustrious brand names as Chopard, Tiffany & Co., Graff, Mikimoto and Faberge (to say nothing of Mercury’s Swiss watch assortment, fashion labels or luxury car brands). In addition to owning TsUM, a neo-Gothic, formerly state-run department store filled with an über-chic selection of goods, Mercury also oversees numerous mono-brand boutiques scattered around the city as well as the sleek Barvikha Luxury Village, located on the outskirts of Moscow.

Photo by Dave Hughes

Bosco di Ciliegi, Mercury’s chief cross town rival, owns a controlling stake in GUM, the city’s premier shopping destination, a gorgeously styled arcade on the edge of Red Square, while Podium positions itself as a retail group for an edgier, younger, more fashion-forward sensibility, with designer jewelry labels like Loree Rodkin, Palmiero and Robert Wan under its umbrella. The groups behind Kosmos-Zoloto, Da Vinci and Louvre are also prominent. Only a few foreign jewelers have succeeded outside the luxury group framework. British designer Stephen Webster, for example, partnered with a wealthy friend of his Russian wife, Anastasia, to open a boutique in one of Moscow’s first luxury hotels, the Ararat Park Hyatt, in 2004. He’s reaped the rewards of that relationship ever since, the prodigious publicity surrounding his launch event having generated enough interest in his rock-and-roll aesthetic to lead to additional partnerships in former Soviet republics as far afield as Tatarstan. Meanwhile, homegrown brands like Smolensk Kristall, a spinoff of the Diamond Trading Co. sightholder, and Jewellery Theatre, known for its inventive diamond and pearl jewels, operate local retail stores while simultaneously showing in local exhibitions such as the Moscow Fine Arts Fair and the Millionaire Fair. Anyone with their sights set on Moscow’s luxury consumers would be advised to check out both events. Judging by the rate at which Moscow mints new billionaires, it won’t be long before today’s mere millionaires make their way on to Forbes’ list.

Fire and ice Palmiero’s Fire pendant, starting at €20,000, or $31,580, is a hit with affluent young Muscovites, the demographic served by Podium, the brand’s Russian distributor. But Russia’s real luxury heavy-hitter is the Mercury Group, whose TsUM department store is located minutes from the onion-domed spires of St. Basil’s in Red Square.