Go East, Young Brand: European Fashion Looks to Former Soviet Bloc for Growth

This year’s crop of annual reports from Europe’s largest fashion brands make it very clear: Growth in the continent’s largest and more mature markets — places like France and Germany — is slowing. But in the east, in countries that were formerly Soviet satellite states, it is speeding up. In fact, in many cases the pace of expansion in places like Slovakia, Slovenia, Lithuania and the Czech Republic has been the only thing keeping some of Europe’s biggest brands in the black. “A lot of those [midmarket] companies would be doing even worse than they are right now if it weren’t for eastern Europe,” observed Achim Berg, leader of consultancy McKinsey’s global apparel, fashion and luxury group. “At the moment, the German economy is struggling, but what is actually keeping them going is demand from eastern Europe,” Richard Grieveson, deputy director of the Vienna Institute for International Economic Studies in Austria, told WWD. “Eastern Europe is becoming incredibly important for western Europe in general.” Take a look at H&M’s 2018 numbers for growth in net sales, for instance. In eastern European and Baltic nations, these (in Swedish krona) clock in at around a hearty 17 percent growth rate. H&M’s overall global growth in

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