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Eastern Europe’s Apparel Retail Flourishes

Eastern Europe’s apparel sector grew at a robust 12 percent last year, with Russia becoming one of the hottest markets for garments.

Russian consumers spent $69 billion on apparel in 2012, making it Eastern Europe’s third largest market, surpassed only by Germany and the UK.

Ukraine also posted double-digit increases in apparel sales for 2012, while apparel sales in other Eastern European countries did not keep pace with the Russian and Ukrainian upturn in buying.  Poland and Romania both experienced a modest 2.7% growth in apparel sales for 2011-2012.

Some slippage was noted for the Czech Republic, with sales down about 2.2%.

Apparel sales fluctuate along with the national economy, rising or declining in tandem with a country’s GDP.  So the increased apparel sales in Russia and Ukraine reflect the improving economies of both nations.

Although brick and mortar retail outlets still dominate, internet apparel sales have been inching upward, representing 3.7% of all apparel buying in the Eastern European region.  Internet buying of apparel in Western Europe represents 8 percent of total sales.

Most of Russian and Ukrainian sales are of standard economy brands, a move up, note some observers, from unbranded and imitation apparel sold in outdoor markets and street side venues.  Designer and luxury brands have not attracted buyers despite the improving economies.

As more international brands enter the Eastern European market, open or affiliate with retail outlets, and become established with consumers, sales are expected to increase accordingly.  Retailers have noted a sharpened consumer appetite for fast fashion.

The once-traditional outdoor markets, meanwhile, have seen a decline in apparel sales to 54 percent of total sales, down from 61 percent in 2007.

Among the multinational brands expanding into Eastern Europe is Inditex, with 345 stores in Russia.  The firm opened seventy-five stores in Russia in 2012.