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Ukraine crisis: Wealthy Russians snap up jewellery, watches as sanctions take toll

Russia’s rich have embarked on a “panic buying” spree in a bid to preserve the value of their savings, as the war continues to deal a severe blow to the country’s billionaires.

With Western sanctions on Russia sending the rouble plunging, the country’s wealthy are snapping up luxury jewellery and watches that have high resale value.

In an interview with Bloomberg, Bvlgari’s CEO, Jean-Christophe Babin, said that the jeweller has seen as increase in sales at their Russian stores. “In the short term, it has probably boosted the business,” Babin commented. He described Bvlgari jewellery as a “safe investment”.

Gold and jewellery have been traditional stores of value for investors in times of turmoil. The luxury watch resale market has also been booming, changing hands in the secondary market for several times their retail price.

Amid the crisis, Europe’s biggest luxury brands, including Bvlgari, Cartier, Omega and Rolex, are continuing to operate in Russia, Bloomberg reported.

Meanwhile, the war has dealt a severe blow to Russian billionaires. The West is continuing to announce fresh sanctions on several Russian oligarchs, including seizing of assets, in a bid to target Vladimir Putin’s closest business allies.

A Forbes report estimates that Russian billionaires have lost more than US$126 billion (S$171 billion) in wealth amid the Ukraine invasion. 

Billionaires have also had their superyachts seized. According to reports, Russian business tycoon Alisher Usmanov’s superyacht Dilbar was restricted from leaving its anchorage in Hamburg, Germany. The value of the yacht, which is equipped with the largest indoor swimming pool ever installed on a private vessel, is estimated at approximately US$735 million. 

French authorities have also seized a massive yacht linked to billionaire Igor Sechin, CEO of state oil company Rosneft.

Other wealthy billionaires are scrambling to move their yachts to the Maldives, which does not have an extradition treaty with the US.

The crisis has also led to a fallout in the sports world. Amid mounting pressure, Russian oligarch Roman Abramovich said that he will sell Premier League football club Chelsea, which he has owned since 2003.

“I have always taken decisions with the club’s best interest at heart. In the current situation, I have therefore taken the decision to sell the club, as I believe this is in the best interest of the club, the fans, the employees as well as the club’s sponsors and partners,” Abramovich said in a statement.

The billionaire also pledged to donate all net proceeds from the sale to victims of the war.

According to British MP Chris Bryant, the fear of sanctions has led Abramovich to sell his London properties. The oligarch owns a 15-bedroom mansion on Kensington Palace Gardens, a wealthy street also known as "Billionaires' Row". 

Source: CNA/st/ds