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MODELING AGENCY

The models of entering foreign markets for each of the brands are individual, according to FCG. "Designers usually start by signing a contract with an already existing showroom, for example in New York or Milan," shares Anna Lebsak-Kleimans. There are even separate showrooms that specialize exclusively in working with Russian brands or represent the designer by selling his collections to their customer base in various department stores that may be located in the UAE, Japan, USA, Europe, etc.

Sometimes large online stores reach out to designers on their own, sending an offer of cooperation. For example, the largest website selling designer clothing NET-A-PORTE worked with Russian designers. However, according to Anna Lebsak-Kleimans, such a practice of initiative on the part of the retailer without the mediation of the showroom is rather the exception than the rule.

The second category of expats are retailers who have already achieved strong leadership positions in the Russian Federation and are entering new markets with a large population (India, China), for example «Sportmaster», O’stin, «Children's World». «Sportmaster» and O’stin came out with the help of a Chinese fund, partly investors, «Children's World» – with the support of an Indian partner. However, experts FCG so far call all these strategies rather "pen breakdown". «For example, «Malone Fashion Group» has experience working abroad, but in most countries, partner stores operate under the brands of the company, – lists Anna Lebsak-Kleimans. So, Ukraine has its own stores,
and franchised ones, but in Kazakhstan, Belarus, Georgia and Armenia stores operate under a franchise.

A relatively new trend is entering foreign markets through online marketplaces. As previously mentioned, Acoola plans to launch online sales in India through local players in 2018 myntra.com , jabong.com and tatacliq.com . Finn Flare sells its products in Germany thanks to Amazon and Otto, and at the end of 2017 sales started on one of the largest European online-Zalando sites. «Unichel» enters the markets of Ukraine and Belarus – the company has agreed on sales through the Lamoda online store.

THIS IS A FAILURE

Test visits to the markets of Eastern Europe were made by many large brands, but then, after analyzing the results, they decided not to develop sales there. So did SELA, OGGY and others.

The assets that companies have in Russia are knowledge of the market, understanding of the current environment, personal contacts for formal and informal solutions to business issues, understanding the specifics of customer demand, and in addition, consumer patriotism russians, – lists Anna Lebsak-Kleimans. There are no such advantages for the pre-Russian affairs, therefore, brands enter into a direct competitive struggle with international and local brands. For example, India (where SELA, Accola, Infinity Lingerie came out) has a national textile base (cotton, wool, knitwear, accessories), high-quality sewing production, therefore it is almost impossible for a Russian brand to offer any price advantages in this market. Most of the major Russian brands have their production outside of Russia, mainly in China and other Southeast Asian countries, which means additional logistical and tax costs, which are reflected in the cost of products of Russian retail brands. In addition, foreign markets always have their own local brands, familiar to customers, to whom they are loyal. So the only possibility is some interesting original "handwriting" design and style of stores, a special relationship with the desks ­­not­ rum in the country, which will provide special benefits when entering the market. Everyone also knows the sad experience of the noisy massive exit "with pomp" and the quiet departure from the USA of the companies Kira Plastinina and Carlo Pazolini.

Anna Panyukova, Development Director of Prime Management, agrees: even with record sales revenues for the Russian market in their stores in America, Carlo Pazolini could not keep up the pace of development. "In Russia, the chain has changed its leadership and weakened its position in retail," Ms. Panyukova reflects. Part of the reason is extensive lending, which, in turn, was precisely due to intensive development. And here it is difficult to determine the root cause of the failure – whether the unjustified growth of the network (as stated by a number of former brand managers), or the policy of development  on borrowed funds and, accordingly, the inability to fulfill obligations when inevitably arising in the work of any  god retailer difficulties. The market is cyclical, and, of course, it is necessary to diversify risks, diversify formats, distribution channels, and so on. Actually, the decline in the Russian retail market since the end of 2014 has exposed the disadvantages of some chains, showing who is really ready to fight for the buyer with falling demand. There are the strongest players who continue to develop.