The Russian apparel retail sector experienced healthy growth in the past, but the annual growth rate decreased. This trend accelerated in 2020, with a decline of -16% due to lockdown measures introduced by the government to control the spread of coronavirus. In 2021, the industry saw strong growth due to increasing vaccination rates and economic growth, with expectations of moderate growth in 2022 and strong growth in the forecast period of 2021-2026.

The decline in the industry can be attributed to the pandemic, which has caused unemployment rates to rise, and consumer spending on non-essential products such as apparel to decrease. The Russian apparel retail industry had total revenues of $34.2 billion in 2021, with a compound annual growth rate (CAGR) of 0.9% between 2017 and 2021.  

The Russian government has increased tariffs on imported goods and banned imports of certain goods, increasing inflation and constraining consumer buyer power. The pandemic has compounded the poor macroeconomic environment, with GDP dropping to -3.1% in 2020. The industry has been impacted by consumer demand for cheap items, fast fashion, and counterfeit clothing, which has negatively affected legitimate retailers’ revenues.

Clothing, footwear, and accessories specialists accounted for the largest proportion of sales in the Russian apparel retail industry in 2021, generating $19.7 billion, with online specialists accounting for 16.2% of industry revenue. Online shopping has become more popular, with growth in the online channel driving revenue growth. The performance of the industry is expected to accelerate, with a CAGR of 6.5% over 2021-2026, driving the industry to a value of $46.7 billion by 2026.

The Russian government’s fiscal stimulus package is expected to aid growth in the industry by providing consumers with greater financial security and improved income prospects. However, the outbreak of the Russia-Ukraine conflict is anticipated to impact the industry, with significant sanctions imposed on Russia directly impacting apparel trade.