Retail sales of clothing and footwear in Russia are likely to rise by an average of 10% a year for the next few years, fuelled by growth in the mid-market segment.

The forecast from PMR comes as its latest research shows the clothing and footwear market in Russia rose 11% in 2010 to $56bn.

With nearly 143m inhabitants, and an economy expected to expand by at least 4% year-on-year in the medium term, Russia remains one of the most attractive retail markets. Total retail sales in the country increased by nearly 13% in 2010 to $540bn, with clothing and footwear the second-largest retail sector after food.

In its report 'Clothing and footwear retail market in Russia 2011: Luxury market insight and development forecasts for 2011-2013,' PMR says clothing accounted for two-thirds of the total clothing, footwear and accessories (CFA) market in 2010, with footwear and accessories contributing around 32% and 2%, respectively.

PMR forecasts that over the next three years, the size of the Russian CFA market will expand, although at a slower pace, to reach around $75bn in 2013. Clothing and footwear will be driven by children's wear, as well as the reviving middle-price segment, PMR analysts indicate. Sportswear and casualwear will also contribute significantly to the expected growth.

In the aftermath of the financial crisis, Russian consumers reduced their spending on clothing and footwear, but in 2010 mid-market growth outpaced the low-price segment. This is now expected to see most dynamic development.

While open-air markets enjoy a significant share of CFA sales, retail chains, online and catalogue sales are predicted to grow most dynamically in Russia.

The luxury clothing and footwear market is also seen to be on the rise again. Many luxury retailers, such as the Ritter Group, intend to focus on regional expansion while other luxury brands are establishing their own distribution channels and terminating their contracts with local distributors.

Among brands that have recently decided to develop independent operations in Russia are Hermes Group and Prada. On the other hand, Hugo Boss plans to continue working with franchisees to exploit the potential of the Russian regions.

The Russian market is also attractive for new players. British designer Stella McCartney re-entered the market at the end of 2010, while London-based Jimmy Choo will open its first mono-brand boutique in the country by September 2011.

In 2011, the competitive landscape has undergone considerable change with the decision by Crocus Group to exit luxury retailing and focus on development projects. The company, which has nearly 60 boutiques in Russia, is closing its stores and passing the rights to develop its luxury brands back to their owners and to market rivals.

This is paving the way for the other luxury players, including four market leaders: Bosco diCiliegi, JamilCo, Mercury Group, and Podium Fashion Group.