The fashion market is experiencing a downturn due to declining demand, high loan rates, and rising costs.
The Russian clothing retailer O’stin has decided to close the stores of the youth brand Face Code, launched in September 2024, three sources in the commercial real estate market told Kommersant. According to them, the company hoped to replace the brands Pull & Bear, Bershka, and Stradivarius from the Spanish Inditex, which left Russia after the start of the war in Ukraine, but Face Code never managed to capture a significant market share, and its total audience on social media does not exceed 4,000 subscribers.
The sources reported that the brand has already vacated spaces in several shopping centers and has not ordered collections for 2026 from suppliers. O’stin ignored the publication's request for comment. According to Shop and Mall, in May, there were 11 stores operating under the Face Code brand in Moscow, St. Petersburg, Voronezh, Novosibirsk, Omsk, Irkutsk, Ufa, and now there are only nine left. This includes the closure of the brand's first offline store, located in the Voronezh shopping center "Arena." The retailer also sells products through marketplaces, but it does not have its own online platform.
The Face Code brand was registered in January 2024 by the Singaporean company Modern Style, which also owns the O’stin trademark, founded by entrepreneurs Vladimir and Nikolai Fartushnyak and Alexander Mikhalsky in 2003 and now has over 600 stores in Russia and the CIS countries. By the end of 2024, the company's net profit halved to 2.6 billion rubles year-on-year, with revenue remaining almost unchanged at 57.2 billion rubles.
Previously, a similar fate befell the youth brand Ready! Steady! Go!, launched by Gloria Jeans in 2024: by summer, the company closed all stores due to unsatisfactory financial results of the project, said the head of the retail space leasing department at CORE.XP, Nadezhda Tsvetkova.
Overall, the Russian fashion market is experiencing a downturn: due to declining demand, high loan rates, and rising costs, in 2025, InCity, Deseo, Just Clothes, Bat Norton, I am Studio, Mellow, Inspire Girls, and Orby either ceased or suspended operations. Stores of the Yollo brand, which entered the market after the start of the war, are also preparing to close.
According to the "Platform OFD," in the first six months of 2025, the total number of clothing and footwear purchases in Russia decreased by 7% year-on-year, while in the offline segment, analysts recorded a decline of 16%. Anna Lebsak-Kleimans, General Director of the Fashion Consulting Group, attributed the decrease in demand to increased basic expenses and rising debt burdens on Russians.
