Fashion

FashionNet: Russia's Bid To Relaunch Its Fashion Industry

sought-after fashion demographic. New York Fashion Week lost several American headliners who opted for showing in Paris. For heritage brands, street-style collaborations became the only way to keep the luxury-fatigued consumers engaged. Retailers faced a business reality wherein a slump in in-store purchases has become “the forever trend” thanks to e-commerce. The fashion system has hit industry-wide turbulence. Sometimes, the most apt solutions come from unexpected places. Russia has emerged as a potential fashion economy savior with its FashionNet project launched at the Mercedes-Benz Fashion Week Russia in Moscow, as part of the National Technology Initiative (NTI).

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MBFW Russia

Artem Shumov S/S 2018 collection show during MBFW Russia

Fashion Perestroika

On one hand, within the quarter of a century since the collapse of the Soviet Union, Russia struggled to produce a globally recognizable fashion brand or commercially viable trend. Before anyone points out the most recent success of Gosha Rubchinskiy, it’s worth noting that his label is owned by Commes de Garcon, a Japanese fashion label founded by and headed by Rei Kawakubo. On the other hand, fashion is a new niche in a country that spent most of the 20th century dressed essentially in preapproved uniforms. FashionNet is a set of initiatives aimed at bolstering Russian fashion industry. However, its principles could be an adaptable case study elsewhere.

It is a brainchild of Dmitriy Peskov, top executive with Agency for Strategic Initiatives, President Putin’s influential think-tank, and Alexander Shumsky, the president of the Russian Fashion Council. With the innovation-savvy Skolkovo Foundation, organizational knowhow leaders PricewaterhouseCoopers, retail conglomerate Bosco di Ciliegi, and industry associations like Russian Outdoor on board, the pedigree behind this project is impressive. So is its ambitious goal: 70% domestic apparel market coverage by 2035. Given that global fashion revenues are estimated to hit nearly $3 trillion by then, the competition for market share is fierce. According to the Ministry of Trade, in 2016 the share of domestic production within the Russian apparel, accessories and footwear market accounted for only a quarter of overall sales or roughly $9 billion.

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MBFW Russia

Slava Zaitsev S/S 2018 Runway Show during MBFW Russia

By comparison, American brand Ralph Lauren alone brought in $7.4 billion in 2016. A comparable Russian designer, Slava Zaitsev, celebrates his 80th anniversary this year. Having started in the mid-1960s, he has impacted post-soviet aesthetics in the way Lauren’s vision had defined Americana. Meanwhile, his iconic brand turned over a mere $2 million! Behind the bleak façade is a tremendous growth opportunity for about 3,000 designers in the Russian Fashion Council’s database. Would FashionNet be the blueprint to get any of them across the billion-dollar mark?! “Unlikely,” notes Alexander Shumsky, “The fashion reality has changed, and there is no room for next unicorn in fashion. It is time to focus on thousands of talents that could grow into strong niche brands as a collective unicorn.”

Alexander Shumsky, the president of the Russian Fashion Council and founder of Mercedes Benz Fashion Week Russia.

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Russia dominates news headlines and arts textbooks. Vodka, ballet, literature… fashion?! Last year will go down in fashion history as a watershed moment when everything changed. Millennials grew up to become the most influential and sought-after fashion demographic. New York Fashion Week lost several American headliners who opted for showing in Paris. For heritage brands, street-style collaborations became the only way to keep the luxury-fatigued consumers engaged. Retailers faced a business reality wherein a slump in in-store purchases has become “the forever trend” thanks to e-commerce. The fashion system has hit industry-wide turbulence. Sometimes, the most apt solutions come from unexpected places. Russia has emerged as a potential fashion economy savior with its FashionNet project launched at the Mercedes-Benz Fashion Week Russia in Moscow, as part of the National Technology Initiative (NTI).

MBFW Russia

Artem Shumov S/S 2018 collection show during MBFW Russia

Fashion Perestroika

On one hand, within the quarter of a century since the collapse of the Soviet Union, Russia struggled to produce a globally recognizable fashion brand or commercially viable trend. Before anyone points out the most recent success of Gosha Rubchinskiy, it’s worth noting that his label is owned by Commes de Garcona Japanese fashion label founded by and headed by Rei Kawakubo. On the other hand, fashion is a new niche in a country that spent most of the 20th century dressed essentially in preapproved uniforms. FashionNet is a set of initiatives aimed at bolstering Russian fashion industry. However, its principles could be an adaptable case study elsewhere.

It is a brainchild of Dmitriy Peskov, top executive with Agency for Strategic Initiatives, President Putin’s influential think-tank, and Alexander Shumsky, the president of the Russian Fashion Council. With the innovation-savvy Skolkovo Foundation, organizational knowhow leaders PricewaterhouseCoopers, retail conglomerate Bosco di Ciliegi, and industry associations like Russian Outdoor on board, the pedigree behind this project is impressive. So is its ambitious goal: 70% domestic apparel market coverage by 2035. Given that global fashion revenues are estimated to hit nearly $3 trillion by then, the competition for market share is fierce. According to the Ministry of Trade, in 2016 the share of domestic production within the Russian apparel, accessories and footwear market accounted for only a quarter of overall sales or roughly $9 billion.

MBFW Russia

Slava Zaitsev S/S 2018 Runway Show during MBFW Russia

By comparison, American brand Ralph Lauren alone brought in $7.4 billion in 2016. A comparable Russian designer, Slava Zaitsev, celebrates his 80th anniversary this year. Having started in the mid-1960s, he has impacted post-soviet aesthetics in the way Lauren’s vision had defined Americana. Meanwhile, his iconic brand turned over a mere $2 million! Behind the bleak façade is a tremendous growth opportunity for about 3,000 designers in the Russian Fashion Council’s database. Would FashionNet be the blueprint to get any of them across the billion-dollar mark?! “Unlikely,” notes Alexander Shumsky, “The fashion reality has changed, and there is no room for next unicorn in fashion. It is time to focus on thousands of talents that could grow into strong niche brands as a collective unicorn.”

Alexander Shumsky, the president of the Russian Fashion Council and founder of Mercedes Benz Fashion Week Russia.

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