E.U. Ledbury Research reported that luxury sales in London will fall

  • Ben Feinstein
  • May 9, 2014
  • 0

Unless you’ve been living under a rock for the last couple of months, then you know the situation in the Ukraine has been less than ideal. The U.S. has placed heavy economic sanctions on Russia as a result of their interference with the civil unrest in the region. Though U.S. business will be hurt by these restrictions, its the countries which fall into the European Union that will be devastated. A substantial percentage of the oil Europe relies on comes from Russia, and these sanctions are estimated to cost billions of dollars. Ledbury Research has good news though, and sees the impact of the Ukrainian crisis as fleeting.

Russian wealth has been a common staple when it comes to luxury goods in the U.K. In 2013 Russians purchased 12% of all prime real estate in London by non-citizens. Russians also spend the third highest amount on luxury goods outside of the E.U. Ledbury Research reported that “luxury sales in London will fall – in the short-term at least. Indeed, expenditure by Russians in the UK was already down by 17% in March.” They see this however as a sign of the weak Rouble due to Russia’s current predicament.

Dislike towards the U.K. and the E.U. is not seen as a reason behind declining sales. Even though Russia is at a point where nationalism is encouraged more than ever, their loyal citizens also have a deep love with their luxury goods. They will instead buy domestically where goods might be a bit cheaper. Ledbury notes that Prada sales are up 30% since the crisis has started. Eventually though the Russian economy will recover, and the flow of Roubles into the west will commence once again.

 

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I love to travel, read, and explore. Life is short and I firmly believe in the pursuit of happiness over money. Please like and share as much as you can.

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