Footwear and apparel chains saw an 8 percent decline in 2014 versus 2013 but the 2.2 trillion rouble market is expected to shrink a further 20 percent, says a report by Fashion Consulting Group (FCG).

      Medium segment brands have been hit hardest, including Savage, InCity, Finn Flare and others, especially those employing the franchise model.

      Plunging sales are forcing chains to revise their contracts with mall owners who are reluctant to switch to the turnover-linked rouble based fee that most brands see as a lifeline in an environment of high inflation and unstable exchange rates.

      As a result, some retailers have to either close down stores or employ other tactics. Fashion brand Kira Plastinina is facing a series of lawsuits from malls worth 45 million roubles who say the firm has stopped payments to have a better negotiating position.

      Set up in 2007 by a drink magnate Sergey Plastinin’s 14-year-old daughter, the chain operates 238 boutiques in Russia and abroad, including in Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova and Ukraine.

      Earlier, Russia-IC reported that Q2 2015 has marked an end to the self-imposed austerity policy for Russian households who are becoming increasingly optimistic about economic outlook.

      35 percent are opening up their wallets for more purchases. But the number of the thrifty folks is still high, around 65 percent are still keeping their fridges half-empty.

      Earlier, Russia-IC reported that inflation will grow faster than wages in 2015 in Russia, according to VTB Bank.