Ruble Appreciation, Fashion Brand Products Cut Prices

Ruble fell at the end of last year.

People rush to buy fur fur coats, BMW cars and iPhone phones.

However, with the rise of ruble since February 2015, the prices of commodities have declined.

Although it is still far below the 1 US dollars in the same period last year to 35.5 rubles, but because of the rebound in oil prices, the rouble has risen from 1 US dollars at the end of January to 70 roubles to the current 1 US dollars to 50 roubles.

With the ruble stabilization, some companies announced the decision to lift the price rise last year, Apple Corp lowered the iPhone price in Russia by about 10%, and some high-end shopping malls began to discount; travel agencies also said that their phone rang again.

According to the Wall Street journal, Yana Starostina, manager of a travel agency in Moscow, said that many customers are now planning to travel to Europe and Egypt. "Of course, the foreign exchange rate has fallen, even if it has only dropped a little bit, and the customers are also very happy."

Anton Abramov, a 27 year old entrepreneur, also said he recently bought a pair of Zanotti designers at TsUM.

TsUM is a high-end department store in Moscow. With the appreciation of rouble, all goods in the store are 15% off.

"That's great!" said Abramov.

Companies that have taken price cuts after the rouble rebound include Spanish fashion.

Mango (Mango).

The company has more than 150 stores in Russia.

To the jackets of all kinds of clothing.

Last month, the company lowered its product price in Russia by 20%.

Breitling, the famous Swiss watch brand, has taken the same measures.

But Abramov is just one of the lucky ones.

Many consumers who were shopping at the end of last year, worried that the ruble continued to dive, found that if they were willing to wait, not to hurry, they could now buy more desirable goods at a cheaper price rather than face the shyness of the present.

Andrey Skripnik is one of these regrets.

In order to avoid being hit by the further decline of rouble, he bought his holiday ticket in April this year in advance last December.

Three months later, with the rouble rebounding, he had bought 15000 roubles for only 8600 roubles.

The 31 year old Muscovite returned from Tel Aviv, Israel, and said, "I realized I was screwed up."

At the end of last year's consumption boom, many people were now stretched to the limit, and the Russian retail industry, which had already been stagnant this year, worsened.

In March this year, Russia's retail sales fell for third consecutive months, or 8.7%.

Natalia Barbashova is an economist in Moscow.

Last December, she bought an imported mink coat with 145 thousand rubles savings.

A few months later, the same coat was only 115 thousand rubles.

Having learned this lesson, she plans to reduce her spending on designer clothes in the future.

"Lower prices do not necessarily lead to sales growth, and it may just stop the downtrend," said Ivan Fedyakov, chairman of St Petersburg research group INFOLine, told Bloomberg. "Russian consumers are no longer in cash reserves. They have spent all of them by the end of last year.

Last December, some people bought two or three televisions at one go, some of them tried to sell them on classified websites.

The Oleg Moseyev, vice president of the Russian Automobile Association, said that for car dealers, the ruble appreciation caused a special problem, that is, some consumers tore up the contract for ordering new cars signed a few months ago.

Matvei Sumin, a 26 year old Moscow lawyer, is one of them.

Earlier this year, Sumin ordered a BMW 320 at a price of 1 million 850 thousand roubles.

"If I want to buy that car, I have to sell the Audi on hand.

Some time ago, I put it on the Internet, but no one was interested.

Russia's Association of European Businesses said on Wednesday that last month's auto sales fell by 43% over the same period last year.

Moseyev pointed out that the country's auto loan subsidies will help boost sales, but it is unlikely that the downward trend will be quickly reversed.

Of course, lower prices will at least help reduce inflation.

Natalya Kolupaeva, an analyst at ZAO Raiffeisen bank, said.

According to the data released by Russian Federation Statistical Bureau on Wednesday, the consumer price index in April dropped slightly, up 16.4% compared with the same period last year, while it rose 16.9% in March, the highest level in 10 years.

Data released by the Russian Federation Statistics Bureau also showed that Russia's consumer confidence index fell by 14 percentage points to -32.3 in the first quarter of 2015 after falling 11 percentage points to -18 in the fourth quarter of last year.

The outlook for consumer spending is still not optimistic.

Moreover, the tension caused by geopolitics has not been alleviated, and the trend of oil prices is uncertain. The overall expectation of the Russian economy is far from optimistic.

According to the world bank's forecast in April, Russia's GDP will shrink by 3.8% in 2015.

And the golden era of ruble may have passed.

In an interview with foreign policy, Chris Weafer, a consultancy based in Moscow, said that the ruble will fall in the next few weeks, closing at 65 rubles to 1 dollars at the end of the year, far below the current level.

The Wall Street Journal quoted the Piotr Matys of Holland's Rabobank as saying: "the ruble appreciation seems to have reached its peak. I find it hard to surpass the level of 1 US dollars to 50 roubles."

Fedyakov says that many consumers can only be disappointed at any time whether the ruble continues to appreciate and whether the goods are depreciating.

Even if the price is cut sharply, people will not be able to buy more appliances, clothing or delicious food because they have no money.