Fashion's retreat from Moscow

Fashion designers are closing their Russian outposts and retreating from Moscow after months of disappointing sales, with Stella McCartney, Alexander McQueen and Vivienne Westwood among those forced to pull down the shutters.

With the rouble plummeting in value and Russia's billionaires tumbling down the Forbes rich list, Moscow's gilded elite are reining in their spending – with British fashion one of the first casualties.

Vivienne Westwood confirmed this weekend that it has closed the designer's store on the exclusive "Boulevard Ring" – one of the most expensive shopping streets in Moscow – explaining that the shop's paltry returns can no longer justify the city's sky-high rents.

"We closed the store because Vivienne is an independent company – we don't have any big group that supports us – so we can't have a store open just for the prestige," said Carlo D'Amario, managing director of Vivienne Westwood. "In Moscow before the crisis the rent became really high, more than in a city like New York or London. The key is the cost of rent," said Mr D'Amario.

In a country known for its love of ostentatious glamour and status symbols, it seems that understated, cutting-edge fashion has been the first victim of the recession.

While all high-end designers have been affected by the downturn in the Russian economy, which is predicted to decline by 4.5 per cent this year, French and Italian labels appear to be faring much better than their British counterparts.

"Italian and French designers are much better known than the English. They are easy to wear and easy to show off – even people who are far away from fashion know Dolce & Gabbana," said Olga Zaretskaya, editor-in-chief of Marie Claire Russia. "If someone who works in an office buys a D&G bag, people will know it cost €3,000 [£2,700]. If she buys a McQueen bag, it will cost her more than €3,000 and no one will know," she said.

British designers were notably absent from this year's Russian Fashion Week (RFW), which closed yesterday, and which has previously played host to designers such as Julien Macdonald.

"In peak seasons, RFW had 65-75 shows, but this season we saw a decrease in the number of participants," said Alexander Shumsky, the president of Russian Fashion Week. "The fashion markets are down, so brands and designers need to reduce expenses," he said.

Moscow's famous department store GUM, which virtually overshadows St Basil's Cathedral in Red Square, has seen the number of shoppers fall by 30 per cent this year.

Happily, the market for British fashion does not look quite so bleak across other emerging markets. Although Vivienne Westwood may be withdrawing on the Russian front, the firm is expanding into Asia; while Alexander McQueen has just opened a new branch in Qatar.

"We are really strong in Hong Kong and Macao, and we are opening in Shanghai and Beijing. We are going to open in other cities in China, and India will happen soon," Mr D'Amario said.