Due to the conflict against Ukraine, Russian citizens are suffering the impacts of war directly in their pockets. In this sense, it is clear that the sanctions imposed by the European Union on Russia caused the collapse of the ruble, keeping the country's stock market locked up. Thus, Russian tycoons are spending their assets on jewelry and luxury watches in an attempt to preserve the value of their savings amid the crisis in Eastern Europe.
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Therefore, sales at Russian Bulgari stores have increased dramatically in recent days due to economic sanctions imposed by the West, which severely restrict the movement of Russian money. Jean-Christophe Babin, CEO of the brand, said in an interview that, in the short term, this dynamic boosted sales of these luxury items in Russia, noting that this type of acquisition can be a good investment.
Afterwards, the executive says that “how long it will last is difficult to say, because, in fact, with the measures of the Swift system fully implemented, can make it difficult, if not impossible, to export to Russia". It is important to point out that, even with the departure of important brands from Russia on the world stage, such as Apple, Nike and energy giants BP, Shell and Exxon Mobil, Europe's big upscale luxury stores are still in the country.
Nevertheless, in an attempt to take an apolitical stance, Bulgari, owned by LVMH, and Cartier, owned by Richemont, are still selling rubbish jewelry and watches in Russia. Babin points out that these stores are in Russia for the Russian people and not for the political world, and points out that these companies operate in several countries that have also gone through uncertainties and moments of voltage. In this way, like gold, these luxury items can serve as a store of value for the protection against inflation, being fundamental for moments of economic turbulence, since these devalue.
In return, the United States withdrew Russian vodkas from supermarkets. However, watches and luxury items can change hands several times without losing much of their value. In this sense, according to this week's report by Edouard Aubin and other analysts at Morgan Stanley, these sales in the abroad account for less than 2% of total revenue for LVMH and Swatch Group and less than 3% for Richemont, a level that is “relatively immaterial". Evidently, some Russian billionaires are living far beyond the means of ordinary people, affecting the population in different ways.
Geographer and pseudo writer (or otherwise), I'm 23 years old, from Rio Grande do Sul, lover of the seventh art and everything that involves communication.