German clothing brands wanted to make money in Russia: how to do it

Despite the Kremlin's armed aggression, the German clothing brand Ultimo Fashion Group plans to enter the Russian market. However, due to the negative political climate and oversaturation of the market, the prospect of success for these brands looks doubtful.

Despite Russia's military aggression against Ukraine, economic sanctions, and the negative political climate, some European companies are still considering entering the Russian market.

One of these companies is the German Ultimo Fashion Group, which may start supplying four of its brands to Russia through the distributor Gerry Weber. In July 2024, LiM Holding LLC, which represents the interests of Ultimo Fashion Group in Russia, registered domains corresponding to the names of four German brands from the Ultimo Fashion Group portfolio: Smith & Soul, Milano Italy, HeartKiss, and Elisa.And.Me.

These actions demonstrate the company's intention to enter the Russian market, despite all the political risks and economic difficulties associated with doing business in the country. Ultimo Fashion Group was founded in 1999 by Thomas Engel and Yasin Shafak and has become known for its high-quality European products. These brands are already represented in several European countries, and now the company is looking to expand its presence in Russia.

It is worth noting that Ultimo Fashion Group products are already available to Russian consumers through the Wildberries marketplace and other online sales channels. However, plans to officially supply and promote the brands in Russia require significant investments.

Despite all these efforts, the promotion of new European brands in Russia remains a challenge. The market is already oversaturated with a variety of offers, and it is becoming difficult for even high-quality products to stand out without significant investment in advertising and strong positioning. These challenges are exacerbated by the negative international perception of the country due to its military actions, which affects the image of brands that dare to operate in Russia.

In addition, Gerry Weber is a mid-price segment brand already present in the Russian market with 141 stores. However, its popularity remains limited due to insufficient representation, especially in the regions where LiM Holding operates through partners. It is not always possible to effectively promote the brand, which affects its competitiveness. At the end of 2023, the company even terminated its commission agreement with the Smart Casual distributor due to weak sales.

As OBOZ.UA reported earlier, some Western companies such as Avon, Air Liquide, and Reckitt, despite their initial plans, decided to stay in the Russian market due to difficulties with the sale of their businesses. More than 2,100 multinationals remain in Russia, while approximately 1,600 international companies have left the market or curtailed their operations.

Only verified information is available on our Telegram channel OBOZ.UA and Viber. Do not fall for fakes!