Russian Billionaires Learn To Embrace Thrift
Oh the plight of the Russian billionaire. They were just getting accustomed to diamond-studded cellphones, huge private yachts and luxury cars and now the boom seems to have gone bust. Bloomberg's Anastasia Ustinova has a piece on the new Russian thrift that is chock full of interesting quotes to parse including this one from Boris Teterev, president of Rolls-Royce Motor Cars Moscow who says "You just can't party when others are starving." Conspicuous consumption in Russia reached heights that made America's wealthiest look modest by comparison but now that exuberant spending is falling out of fashion.
Last year Moscow had 74 billionaires, this year just 27. Forbes has reported that the 25 richest Russians lost a combined $230 billion during six months last year. It bears noting that one Russian billionaire, Alexander Lebedev, has threatened to sue Forbes over its estimation of his losses.
While spending may not be fashionable that doesn't mean it isn't going on in Russia, it just happening at a more low profile level. The Bloomberg article also quotes lawyer Alexander Dobrovinsky who speaks of names being removed from private jets. Once one has become accustomed to certain luxuries it can be hard to part with them. The trick for some is staying out of the public eye.
Part of the change comes from President Dmitry Medvedev who has come out against luxury trips for government officials and against spending in general. Even Mikhail Prokhorov, Russia's richest man, has declared in Snob, his lifestyle magazine for the ultra-wealthy, that "saving money is the trendiest thing to do at the moment."
Reports like this aren't welcome news to some luxury brands who were hoping that Russian big spenders could help keep them afloat in tough times. They may have to set their sights on the wealthy in China instead.