Gucci's Franchisee Predicts Boom in Sales

Itar-TassGuests arriving for the opening party of the Gucci boutique at Barvikha Luxury Village shopping mall in September.
Mercury Group, the Russian franchisee for European luxury-goods makers including PPR's Gucci unit, expects sales to rise 50 percent in 2007.

Sales have gained between 25 percent and 50 percent a year since Mercury was founded in 1994, vice president Alla Verber said. The purchase and remodeling of the TsUM department store, next to the Bolshoi Theater, will boost revenue to a record this year, she said.

The country's luxury-goods market may expand by as much as 20 percent in 2007, according to Verber. TsUM, a flagship state department store in the Communist era, now sells goods under luxury brands such as Giorgio Armani.

New shopping malls and hotels will stoke purchase of luxury products in the country in coming years, said Verber, who expects Mercury's sales to gain 25 percent in 2008. She didn't give figures for revenue.

Verber also said Mercury, which is co-owned by businessmen Leonid Fridlyand and Leonid Strunin, has no plans to seek loans, sell bonds or become publicly traded.

Mercury owns the Barvikha Luxury Village shopping center on the outskirts of Moscow, where companies such as Dolce & Gabbana have stores. It also owns Tretyakovsky Passazh, a lane of shops in central Moscow that sell cars from manufacturers such as Bentley and Maserati as well as high fashion.