Ukrainian Fashion Brand in Bombarded City Picks up and Flees

Ukrainian hat makers for high-end designer brand Ruslan Baginskiy "RB", work inside a college classroom turned into a working space for the company after fleeing Kiev, in Lviv, western Ukraine, Friday, March 25, 2022. (AP)
Ukrainian hat makers for high-end designer brand Ruslan Baginskiy "RB", work inside a college classroom turned into a working space for the company after fleeing Kiev, in Lviv, western Ukraine, Friday, March 25, 2022. (AP)
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Ukrainian Fashion Brand in Bombarded City Picks up and Flees

Ukrainian hat makers for high-end designer brand Ruslan Baginskiy "RB", work inside a college classroom turned into a working space for the company after fleeing Kiev, in Lviv, western Ukraine, Friday, March 25, 2022. (AP)
Ukrainian hat makers for high-end designer brand Ruslan Baginskiy "RB", work inside a college classroom turned into a working space for the company after fleeing Kiev, in Lviv, western Ukraine, Friday, March 25, 2022. (AP)

Just days ago, Artem Gorelov was trying to survive in one of the most brutal parts of Ukraine, the Russian-occupied Kyiv suburb of Bucha. Now he stands in a quiet room in the late afternoon sunlight, hand-making hats for a local fashion brand worn by Madonna and Ukraine’s first lady.

Gorelov has joined Ukrainians’ massive migration west to the city of Lviv, near Poland. And, unusually, the 100-employee company he works for arrived with him. Searching for safety but determined not to leave Ukraine, the brand Ruslan Baginskiy is among the businesses that are uprooting amid war.

Two months ago, first lady Olena Zelenska was in the hat-maker’s showroom in Kyiv. Now the company operates in two borrowed classrooms of a school, its workers delicately piecing together materials near students’ decades-old sewing machines.

It is a slower process, but clients like Nieman Marcus and Bloomingdale’s have expressed support, said co-owner Victoria Semerei, 29.

She was among the Ukrainians who didn’t believe Russia would invade. She recalled being in Italy the day before the invasion and telling partners that war wasn’t possible.

Two hours after her plane landed back in Kyiv, the bombardment began.

Daily bombings led the company’s three co-founders to make the decision to flee. While some employees scattered to other parts of Ukraine or to other countries, about a third moved the company’s essentials to Lviv two weeks ago.

“Normal life will resume one day,” Semerei said. “We need to be prepared.”

The company threw itself into the national wartime effort that has seized Ukraine, donating money to the army and turning its Instagram feed from brand promotion to updates on the war.

“This is not the time to be shy. Not anymore,” co-founder and creative director Ruslan Baginskiy said. The company once had Russian clients, but that stopped long before the invasion as regional tensions grew. “It’s not possible to have any connections,” he said. “It’s all political now.”

As part of that spirit, Semerei rejected the idea of moving the company to a safer location outside Ukraine. “We have our team here, the most precious team we have,” she said. “Talented, all of them.”

Past brand campaigns for the company have identified closely with Ukraine, photographed in places like Kherson, now under Russian occupation. Cities that the hat-maker’s employees once called home have been torn apart.

“So many Russian troops,” said Gorelov, who fled Bucha near the capital. “It was not even possible to defend.”

His arrival in Lviv, where life goes on and fashionable shops remain open, was surreal. It took days to adjust. Now “I feel relaxed doing this,” he said, a new hat under construction on the table before him.

In another corner of the makeshift workspace, Svetlana Podgainova worried about her family back in the separatist-held territory of Luhansk in eastern Ukraine, where pro-Moscow separatists have been fighting for control for nearly eight years. It was already difficult to visit with family even before the invasion. Now her brother can’t leave the region.

She feels horrible seeing her colleagues from other parts of Ukraine pulled into the war and wishes that normal life would return for them all. Until then, “I wanted to come back to work so much,” she said. It occupies her mind and makes her feel less alone in a new city, and she calls her colleagues a “big family.”

The hat-maker’s employees are among the estimated 200,000 displaced people now living in Lviv, with the co-founders now sharing an apartment with several other people.

Considering the challenges, this year probably will be the worst in the company’s six-year history, Semerei said. But “this is something we’ll go through and hopefully be even stronger.”



Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
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Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)

Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9 billion), an 11% drop on an organic basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9% drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30%, following a 42% drop in the first half.

Sales at Gucci fell 19%, showing no improvement from the first quarter, and below analyst expectations for a 16% decline, according to a Visible Alpha consensus.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

Kering chief financial officer Armelle Poulou told reporters that the designs had been well received and the rollout was on track.

But the efforts have been complicated by a downturn in the global luxury market, while China's rebound - traditionally Gucci's most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

Earnings from sector bellwether LVMH on Tuesday missed expectations as sales rose 1%, offering few signs that a pickup is around the corner, sending shares in luxury goods companies down on Wednesday. Kering traded at its lowest level since 2017.