Good news: still growing, still adding customers

Bad news: slowdown has begun(?)

Some anecdotes on the latter:

1) Cosmetics stores which were doing 50K rubles/week in mid 2008 did as little as 5K rubles in the week ending 5/10

2) Shelves are noticeably emptier. One example: official carriers of cosmetics like Shiseido have in a number of cases run out. When I asked if they were still selling Shiseido, the answer was yes but that there was no supply.

3) Prices for 'made in Russia' cosmetics still rising. Clearly base materials are imported.

4) Interest rates are a max of 18%. Citibank Russia interest rates still roughly the same, but max interest rates are no longer available more than 3 months (12%, 13% with 'special). Sberbank interest rates roughly 9%/10%

5) Palpable concern over jobs in the group of people I normally spend time with there

6) Orders from largest customer dropped from $35K/quarter to $12K this quarter

7) Exchange rates down below 32 - from trough of 36+. CBR has cut interest rates in small increments.

8) Construction activity has come to a complete stop

9) Customs officials are significantly more severe than previously

10) Office rents have fallen in many cases outside of the minimum size commercial space. Some commercial real estate holders are refusing to drop prices for existing stores, but in response at least one store was closed. Retail consolidation at least for cosmetics proceeding apace. Anecdotal evidence also for 'big box' retailers.