MOSCOW - STANDING in velvet sweatpants near his orange Porsche, Russia's most flamboyant tycoon takes a moment to ponder the fortune he lost last month to the global financial crisis.

Yevgeny Chichvarkin, with his trademark mullet, still looks like the poster boy of Russia's retail revolution. But he's clearly deflated by the forced sale of Euroset, his multi-billion-dollar phone retailer, for a fifth of its value.

'Losing money can't be the biggest mistake of your life,' says Mr Chichvarkin, 34, of his failure to sell before the crisis hit. 'But from a financial point of view it probably was.'

The credit crunch has gouged hundreds of billions of dollars from the fortunes of Russia's richest and frozen the hyper-capitalism that helped Euroset grow from five to 5,000 stores in seven years.

The oligarch overlords of Russia's oil-driven boom have in recent weeks seen their fortunes gutted as stocks plunged 60 per cent below record May levels, wiping out close to one trillion dollars in shareholder value.

Moscow skyscraper tycoon Sergei Polonsky says he can't afford to start any new buildings.

Metals magnate Oleg Deripaska, Russia's richest man according to Forbes magazine, has been forced to start selling off assets.

The number of Russian billionaires almost doubled year-on-year to reach 110 in 2008, Forbes reported April in its local edition, bolstering the country's reputation for conspicuous wealth.

But 'when the Forbes list is drawn up in 2009, there will be a lot fewer Russian billionaires,' says Moscow-based equities analyst Chris Weafer.

Mr Chichvarkin, like many Russian moguls, rode a wave of cheap credit to expand aggressively in recent years, taking two stores and building the country's largest phone retailer with annual revenues of over US$3 billion (S$4.4 billion).

But as credit markets froze up in September, the banks cut him off, refusing to refinance his loans.

His business model collapsed, and he says he was forced to sell for 'five times less' than he could have just months earlier.

He says he still has some money, 'but not enough to do what I could have done'. The Kommersant business daily reported he and his partner were left with US$400 million between them, implying a loss of US$1.6 billion dollars.

In building an empire on cheap credit, Mr Chichvarkin was not alone.

Many top-tier Russian tycoons are doubly exposed, having used the high values of their share holdings to attract huge loans for aggressive expansion, says Vladimir Fedorin, the deputy editor of Forbes Russia.

'This kind of leverage has been the biggest tool for expansion within Russia and abroad,' says Mr Fedorin, who tracks the oligarchs' fortunes. 'Suddenly the model just stopped working.'

When the dust settles, the shake-up in the Russian elite will be 'in every way as big' as the 1998 crash that decimated the country's economy and caused 80 per cent of names to disappear from the Forbes list, he says.

Compounding the flight of investors from the risks of the Russian market is the fear a global downturn would cut the oil price, the foundation of Russia's boom and many of the fortunes it created, analysts say.

The risk that the credit crunch causes a collapse in consumer spending, widely seen as the second pillar of Russia's economic miracle, is something Chichvarkin says the authorities 'should not allow under any circumstances'.

Mr Chichvarkin, who is running Euroset on behalf of the new owners, said no significant drop in sales had been registered so far, but the threat of bankruptcy remained.

'It all depends on how the crisis develops,' he says.

Some oligarchs, including Chelsea Football Club owner Roman Abramovich, appear to be sufficiently cash-rich to take advantage of the crisis, says Weafer, who tracks top Russian companies for the Uralsib investment bank.

But once the dust settles, Russia's tycoons as a class will have been cut down a notch, he sys.

'Lower asset prices will restrain spending,' he predicts. 'It will be less socially acceptable to throw money around.'

Mr Chichvarkin, who is preparing to move Euroset's offices to a cheaper Soviet-era building also finds it hard to see a silver lining: 'There has never been as crisis like this. No-one knows what to do,' he says. 'A way of life has been put in question.' -- AFP