About 7 percent of all clothes and shoe shops in Moscow have shut down this year as Russia's economic crisis decimates retail sales, a news report said.
"In big Russian cities, and most notably in Moscow, the number of shops has fallen by at least 5-7 percent [this year]," Igor Ulyanov, director of the Russian textile association, Soyuzlegprom, told Moskva, the city's official news agency.
A toxic combination of steep price inflation driven by the devaluation of the ruble currency and an unfolding economic recession has sent Russian retail sales plummeting this year — and retailers are paying the price.
In monetary terms, sales of clothing and shoes fell by 19 percent in the first quarter compared to the same period in 2014, Ulyanov said. The volume of shoes and clothing sold fell 42 percent, he added.
"The result is that clothes and shoe sellers are cutting costs by closing stores and lowering wages," Ulyanov told the agency.
Adding to retailers' woes, the ruble's fall of some 40 percent against the U.S. dollar in 2014 severely inflated dollar-denominated rental rates in relation to ruble-denominated revenues.
"Due to very high rental rates, we have been forced to close shops. However, we are not closing altogether," a spokesman for major Russian shoe retailer City Obuv told the news agency.
Russia's economy is expected to contract by around 3 percent this year as low oil prices and Western sanctions over the Ukraine crisis strangle investment.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.