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).
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.
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."
New names is the hottest Millennial trend, especially in emergent markets. Beyond Not Just a Label and Tictail, two of the leading showcase e-platforms with 70K+ independent designers vying for consumer attention online, there are regional players like Fashion Ally in Hong Kong and Creative Shelf in Dubai. Small labels have become a big economic force. The phenomenon is equal to emergence of another multi-billion-dollar conglomerate to rival Chanel & Co. Russian designers have been historically relegated to the margins both inside and outside Russia. For them, a government-backed fashion-specific support initiative sounds both revolutionary and too good to be true. The runway buy-in is cautious while backstage enthusiasm is palpable.
Creative Marketplace
FashionNet is a decisive departure from the official stance of recent years. Driven by Russian Ministry of Industry and Trade and led by Victor Evtukhov, Deputy Minister, many earlier policies drew criticism as favoring foreign brands and envisioning Russia as a fast fashion manufacturing haven competing with Vietnam, Kenya or Romania for outsourced apparel production. This official strategy misfired amid crippling sanctions, geopolitical volatility of Russia’s Doing Business index from the World Bank, country’s own Central Bank report questioning competitiveness of Russian workforce in the global labor market. This radical fashion paradigm shift was long overdue, especially in the face of growing challenges from the neighboring powerhouse of China as well as fashion tech advances in robotics and artificial intelligence. Clearly, the future belongs to creativity! Younger, smaller brands adapt more easily to new production and retail models.
Among current Russian standout brands that would potentially benefit the most from FashionNet are Anastasia Zadorina (who aced the challenging task of outfitting Russian athletes for the Winter Olympics), Alena Akhmadullina, Dasha Gauser, Yasya Minochkina, menswear wunderkind Artem Shumov, modest fashion star Aishat Kadyrova, two ever-competing Igors - Igor Chapurin and Igor Gulyaev, Volchok, Cloudburst and a mix of other promising startups and established designers.
Alexander Shumsky insists that today a designer must be a visionary business leader as well. An industry veteran, he is confident in the long-term success of the initiative, because FashionNet accounts for two of the major fashion consumer trends: responsiveness to digital narrative marketing and desire for instant accessibility of latest available styles. In the vision of the Agency of Strategic Initiatives, FashionNet is the marketplace of the future. It identifies sectors that are expected to grow dramatically within the next twenty years. It places the focus on supporting smaller emerging brands and changing the educational system instead of adhering to Soviet era cultural ideology and infrastructure. Sensorics, MES-and ICS-systems, AR and VR, big data and blockchain… the proposed factory settings read like a zeitgeist tech manual. These production facilities are currently in development across the European part of the country: Moscow, St. Petersburg, Ivanovo (a historic textile center) and Kaliningrad, Russia’s westernmost commercial port.
“The FashionNet market goes far beyond the light industry, because it includes many related things, including logistic infrastructure, electronic commerce, support of small businesses and young designers; companies that already can directly enter the world markets, without becoming major players but staying small and medium ones. These are new technology related not only to materials and fabrics, but also to portable devices, and electronics,” stressed Oleg Fomichev, the Deputy Minister of Economic Development of the Russian Federation.
Next Steps
As part of the educational FashionNet outreach, Mercedes-Benz Fashion Week Russia co-organized Fashion Futurum Accelerator, a program that helps young fashion talent to set up a brand from scratch. At the forum in Moscow, Carlos Espinosa De Los Monteros, vice president of Inditex, remarked that “Russia has been perceived as a country able to produce steel, oil, gas - production goods, but not consumer goods. Russia should make an effort to show that it is a country of talent, of great people, of sophisticated individuals in different areas and present the image of new Russia.” Designers Snezhana Paderina, Olga Bugankova with Morkovka Design, and Jean Rudoff of Lumiere Garson was selected for the FashionNet pilot mentorship program. Would they deliver on its grand premise?
All eyes will be on the #MBFWRussia runway in March 10-15, 2018. It seems that the moment has arrived to embrace fashion perestroika as the global fashion industry collapses under the weight of outdated style ideology and business practices. Luckily, the Millennials are also the first fully digital generation that embraces post-globalized worldview: a cool thing is indeed cool anywhere.
