Rising commodity prices: negative impact of 2-3% on luxury. Shoe price in Russia +15-25% in 2022, due to increased production costs and depreciation of the ruble. The Russian government intends to allow repayments in rubles to counterparts in "hostile" countries. [Sources: Shoe Intelligence and CNBC]
The Russian invasion of Ukraine is starting to hit businesses. In addition to rising commodity prices, the conflict is expected to have a negative impact of 2-3% on the global market for personal luxury goods.
Rising inflation and tensions on the global supply chain remain at the forefront for retailers as they face the post-holiday earnings season. But the Russian invasion of Ukraine is also making its way into talks with analysts and investors.
The ongoing war is severely affecting the Russian footwear market. Many retailers have temporarily suspended activities in Russia, either as a sign of corporate condemnation of the war or because these companies are unable to carry out activities in the country due to the sanctions imposed that affect logistics.
According to forecasts by the Russian analysis agency Fashion Consulting Group, the price of footwear in Russia will increase by at least 15-25% in 2022 due to the increase in production costs and the depreciation of the Russian ruble
The Russian government has also ruled that local companies can reimburse counterparts in "hostile" countries in rubles rather than foreign currency. The retaliatory measure follows the introduction of international sanctions against Russia.
