With the ruble down 40 percent against the dollar so far this year, and down more than 14 percent in the last 30 days, one might have expected widespread economic panic among Russians. But there's been nothing of the kind. It's been business as usual in Moscow: no bank runs, no desertion of retail stores, no sign of consumer hoarding. Only expensive cars and luxury items are selling better than usual, and that's evidence only of bargain-hunting among the Moscow elite.
When you expect panic, it's easy to pick up signals that match those expectations: store and restaurant closures, long lines for good that suddenly became scarce, ATMs routinely running out of cash. Sure enough, observers have found plenty of alleged evidence for economic distress. Fashion Consulting Group, a Moscow consulting company, estimated that fashion sales in Russia dropped 7 to 8 percent year on year in the first six months of 2014, and predicted they would be down 20 percent for the full year. Mexx, the Dutch mid-range clothing brand with 100 stores in Russia, cited ruble devaluation and Eastern European political unrest among the reasons for its bankruptcy filing last week. Zara, the biggest brand of Spanish fashion group Inditex, closed its Moscow flagship store a stone's throw from the Kremlin this month.
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