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Mikael · 05-02-2009, 10:35 AM

By Anastasia Ustinova

April 8 (Bloomberg) -- Champagne and caviar are out in Moscow, and vodka and pelmeni dumplings are back in.

Rich Russians, stung by the end of the biggest economic boom in their history, are tempering the opulent lifestyles that made the city of 10 million the bling capital of Europe.

Demand for private jets and $500,000-a-week yachts has collapsed, while a survey by restaurant consulting group Restcon found revenue at high-end eateries has halved. Luxury-clothing boutiques selling brands such as Alexander McQueen and Stella McCartney are closing down.

“A new lifestyle mentality is taking shape,” said Roman Trotsenko, 38, the millionaire founder of airport builder Novaport. “People aren’t really in the mood to party.”

Moscow had 74 billionaires a year ago, more than any other city in the world. Now it has 27, according to Forbes magazine. The 25 richest Russians lost a combined $230 billion during six months last year as the value of their companies plunged along with commodity prices, according to Bloomberg calculations.

The government expects the economy to shrink 2.2 percent this year after expanding about 7 percent a year since 1999. Unemployment is at a four-year high of 8.5 percent. The proportion of people who consider themselves “poor” has doubled to 14 percent in the past year, according to the All- Russian Center for the Study of Public Opinion in Moscow.

“You just can’t party when others are starving,” said Boris Teterev, president of Rolls-Royce Motor Cars Moscow, which opened in 2004 to cater to Moscow’s nouveau riche.

‘Spending Isn’t Fashionable’

Trotsenko said Russians are increasingly spending more time with their families, on trips to theaters and museums and “home parties” with vodka and pelmeni.

Conspicuous consumption was socially acceptable during the boom, when unemployment was falling and wages were rising, said Trotsenko, who is worth $70 million, according to Finans magazine, a Russian competitor of Forbes.

Teterev, 55, who has a personal fortune of $200 million, according to Finans, envisages Rolls-Royce sales will fall by as much as a third this year. That’s about twice the rate of decline that Milan-based industry group Altagamma predicts for Russia’s $5.7 billion luxury market as a whole.

“Spending just isn’t fashionable anymore,” said Kirill Shishkov, co-owner at Teorema Holdings, which develops residential and commercial property in St. Petersburg.

Shishkov, 37, who spoke by mobile phone en route to the Swiss Alps, also is among the 400 Russians who are worth at least 2 billion rubles ($60 million) each, according to Finans.

Full article: http://www.bloomberg.com/apps/news?p...9f4&refer=home

Rob · 05-04-2009, 01:06 AM

Interesting article.

Mikael · 05-04-2009, 01:23 PM

The excessive lifestyle of Russian's nouveau riche simply wasn't on a sustainable base.

05-02-2009, 10:35 AM	#1
Mikael Fanatic Moderator Emeritus Join Date: Nov 2005 Posts: 1,836 Thanks: 828 Thanked 415 Times in 233 Posts	Party Ends for Russian Rich After $230 Billion Losses By Anastasia Ustinova April 8 (Bloomberg) -- Champagne and caviar are out in Moscow, and vodka and pelmeni dumplings are back in. Rich Russians, stung by the end of the biggest economic boom in their history, are tempering the opulent lifestyles that made the city of 10 million the bling capital of Europe. Demand for private jets and $500,000-a-week yachts has collapsed, while a survey by restaurant consulting group Restcon found revenue at high-end eateries has halved. Luxury-clothing boutiques selling brands such as Alexander McQueen and Stella McCartney are closing down. “A new lifestyle mentality is taking shape,” said Roman Trotsenko, 38, the millionaire founder of airport builder Novaport. “People aren’t really in the mood to party.” Moscow had 74 billionaires a year ago, more than any other city in the world. Now it has 27, according to Forbes magazine. The 25 richest Russians lost a combined $230 billion during six months last year as the value of their companies plunged along with commodity prices, according to Bloomberg calculations. The government expects the economy to shrink 2.2 percent this year after expanding about 7 percent a year since 1999. Unemployment is at a four-year high of 8.5 percent. The proportion of people who consider themselves “poor” has doubled to 14 percent in the past year, according to the All- Russian Center for the Study of Public Opinion in Moscow. “You just can’t party when others are starving,” said Boris Teterev, president of Rolls-Royce Motor Cars Moscow, which opened in 2004 to cater to Moscow’s nouveau riche. ‘Spending Isn’t Fashionable’ Trotsenko said Russians are increasingly spending more time with their families, on trips to theaters and museums and “home parties” with vodka and pelmeni. Conspicuous consumption was socially acceptable during the boom, when unemployment was falling and wages were rising, said Trotsenko, who is worth $70 million, according to Finans magazine, a Russian competitor of Forbes. Teterev, 55, who has a personal fortune of $200 million, according to Finans, envisages Rolls-Royce sales will fall by as much as a third this year. That’s about twice the rate of decline that Milan-based industry group Altagamma predicts for Russia’s $5.7 billion luxury market as a whole. “Spending just isn’t fashionable anymore,” said Kirill Shishkov, co-owner at Teorema Holdings, which develops residential and commercial property in St. Petersburg. Shishkov, 37, who spoke by mobile phone en route to the Swiss Alps, also is among the 400 Russians who are worth at least 2 billion rubles ($60 million) each, according to Finans. Full article: http://www.bloomberg.com/apps/news?p...9f4&refer=home

05-04-2009, 01:06 AM	#2
Rob Aficionado Join Date: Sep 2005 Posts: 4,618 Thanks: 892 Thanked 719 Times in 401 Posts	Interesting article.

05-04-2009, 01:23 PM	#3
Mikael Fanatic Moderator Emeritus Join Date: Nov 2005 Posts: 1,836 Thanks: 828 Thanked 415 Times in 233 Posts	The excessive lifestyle of Russian's nouveau riche simply wasn't on a sustainable base.

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Party Ends for Russian Rich After $230 Billion Losses