June 03, 2026

Fashion's Breaking Point


Fashion's Breaking Point
A clothing shop in a mall in Rostov-on-Don. Vyacheslav Argenberg, Wikimedia Commons.

Russian clothing brands are increasingly warning that they are in crisis. Some are holding clearance sales, while others are closing workshops or reducing their retail footprint. According to some forecasts, as many as 40% of clothing stores in Russia could shut down by the end of 2026.

Novaya Gazeta Evropa interviewed several Russian fashion entrepreneurs, suggesting the industry is facing a combination of falling consumer demand, rising costs, and mounting regulatory pressure.

Appeals for support and announcements of emergency sales have become increasingly common on social media since April. Industry data point to a broader slowdown: purchases of clothing and footwear fell in 2025, while business closures accelerated in early 2026. Many founders say the current downturn is more damaging than the disruption that followed Russia’s full-scale invasion of Ukraine in 2022.

"At first we thought the drop in sales was temporary," said Aglaya, founder of a small fashion brand. "But now we’re at the point where working capital has almost run out." Other business owners described a similar pattern: Demand began weakening in 2025 and has continued to deteriorate.

Entrepreneurs overwhelmingly blame declining purchasing power. Customers are spending more on essentials, while wages fail to keep pace with rising prices. High interest rates have added to the problem, encouraging consumers to  save rather than spend, while making business loans increasingly expensive.

Many brands report that discounts have become one of the few reliable ways to attract buyers. At the same time, operating costs continue to climb. Expenses for raw materials, logistics, rent, and labor have increased steadily, while some regional wholesale partners have gone out of business, further straining supply chains.

Founders also point to growing regulatory burdens. Tax changes introduced in 2026 have hit medium-sized businesses particularly hard. Russia’s value-added tax (VAT) rate increased from 20% to 22%, while the revenue threshold allowing small businesses to avoid VAT obligations was sharply reduced. Several entrepreneurs said their tax bills multiplied as a result.

Another frequent complaint is the Chestny Znak ("Honest Sign") product-labeling system, which tracks goods throughout the supply chain. Business owners say the concept is reasonable, but implementation has been difficult, forcing many companies to hire outside specialists and invest in additional technical infrastructure to comply with the requirements.

Restrictions on social media have also reshaped the market. Several founders said advertising bans and platform blockages deprived brands of one of their main tools for attracting new customers. 

The pressure is prompting some companies to move production abroad. Clothing giant Gloria Jeans has already shifted most of its manufacturing to Bangladesh, Vietnam, and Uzbekistan. Smaller brands are following suit, citing lower costs, better access to materials, and more favorable business conditions in countries such as China.

Despite the challenges, some entrepreneurs remain cautiously optimistic. Others say they are operating on the edge, uncertain whether their businesses will survive. For many, the goal is no longer growth but endurance.

You Might Also Like

Vika Andreyanova, designer

Vika Andreyanova, designer

Vika Andreyanova is a designer who shuns haute couture that is designed to garner “oohs” and “aahs,” never to make it out of the closet again.
Taking Fashion to the French
  • November 01, 1996

Taking Fashion to the French

Of the brave first generation of Russian fashion designers, no one is as flamboyant and extravagant as Valentin Yudashkin. Our correspondent finds out what lies behind the success of this eccentric aesthete.
War Came to Moscow
  • May 27, 2026

War Came to Moscow

A recent drone attack shocked residents of the Russian capital.
Mines Die, Dust Remains
  • May 20, 2026

Mines Die, Dust Remains

Open-pit mining continues while locals face both unemployment and worsening pollution.
A Sobering Trend
  • May 24, 2026

A Sobering Trend

Are Russians giving up alcohol? Signs are pointing in that direction.
Like this post? Get a weekly email digest + member-only deals

Some of our Books

How Russia Got That Way
September 20, 2025

How Russia Got That Way

A fast-paced crash course in Russian history, from Norsemen to Navalny, that explores the ways the Kremlin uses history to achieve its ends.

A Taste of Chekhov
December 24, 2022

A Taste of Chekhov

This compact volume is an introduction to the works of Chekhov the master storyteller, via nine stories spanning the last twenty years of his life.

Steppe
July 15, 2022

Steppe

This is the work that made Chekhov, launching his career as a writer and playwright of national and international renown. Retranslated and updated, this new bilingual edition is a super way to improve your Russian.

Bears in the Caviar
May 01, 2015

Bears in the Caviar

Bears in the Caviar is a hilarious and insightful memoir by a diplomat who was “present at the creation” of US-Soviet relations. Charles Thayer headed off to Russia in 1933, calculating that if he could just learn Russian and be on the spot when the US and USSR established relations, he could make himself indispensable and start a career in the foreign service. Remarkably, he pulled it of.

Little Golden Calf
February 01, 2010

Little Golden Calf

Our edition of The Little Golden Calf, one of the greatest Russian satires ever, is the first new translation of this classic novel in nearly fifty years. It is also the first unabridged, uncensored English translation ever, and is 100% true to the original 1931 serial publication in the Russian journal 30 Dnei. Anne O. Fisher’s translation is copiously annotated, and includes an introduction by Alexandra Ilf, the daughter of one of the book’s two co-authors.

The Little Humpbacked Horse
November 03, 2014

The Little Humpbacked Horse

A beloved Russian classic about a resourceful Russian peasant, Vanya, and his miracle-working horse, who together undergo various trials, exploits and adventures at the whim of a laughable tsar, told in rich, narrative poetry.

The Pet Hawk of the House of Abbas
October 01, 2013

The Pet Hawk of the House of Abbas

This exciting new trilogy by a Russian author – who has been compared to Orhan Pamuk and Umberto Eco – vividly recreates a lost world, yet its passions and characters are entirely relevant to the present day. Full of mystery, memorable characters, and non-stop adventure, The Pet Hawk of the House of Abbas is a must read for lovers of historical fiction and international thrillers.

 
Faith & Humor
December 01, 2011

Faith & Humor

A book that dares to explore the humanity of priests and pilgrims, saints and sinners, Faith & Humor has been both a runaway bestseller in Russia and the focus of heated controversy – as often happens when a thoughtful writer takes on sacred cows. The stories, aphorisms, anecdotes, dialogues and adventures in this volume comprise an encyclopedia of modern Russian Orthodoxy, and thereby of Russian life.

At the Circus
January 01, 2013

At the Circus

This wonderful novella by Alexander Kuprin tells the story of the wrestler Arbuzov and his battle against a renowned American wrestler. Rich in detail and characterization, At the Circus brims with excitement and life. You can smell the sawdust in the big top, see the vivid and colorful characters, sense the tension build as Arbuzov readies to face off against the American.

About Us

Russian Life is the 31-year-old publication of an award-winning publishing house that also creates books, and other products for Russophiles the world over.

Latest Posts

Our Contacts

Russian Life
73 Main Street, Suite 402
Montpelier VT 05602

802-223-4955