The war in the Ukraine brought quick action by several Western retail companies. Many luxury companies, as well as moderately priced businesses, are closing or restricting their operations in Russia. Several companies have indicated that they will continue to pay salaries and benefits to their Russian associates, hoping to reopen their stores soon.
I have listed some of those companies that have taken action so far. (The list will be updated as information becomes available)
1. ASOS. This fast-fashion retailer has suspended operation in Russia, and also suspended operation in Ukraine immediately after the invasion.
2. Burberry. Burberry has frozen shipments to Russia according, to Vogue Business.
3. Canada Goose. Canada Goose announced that it was suspending all e-commerce and wholesale sales in Russia.
4. Chanel. Chanel closed its boutiques in Russia and is no longer delivering merchandise into the country. The company also suspended their e-commerce activity in Russia as well.
5. Golden Goose. Golden Goose, an Italian brand, said it stopped shipping to its Russian outlet because of trade restrictions.
6. H&M. H&M closed stores in Ukraine and temporarily halted sales in Russia.
7. Hermès. French luxury group Hermès said last Friday they would close temporarily their three stores in Russia. It was the first company to make such an announcement. Hermès has all three stores in Moscow.
8. Ikea Group. The company halted all exports and imports out of and into Russia and “its ally, Belarus”. The company also paused all Ikea production operations in Russia, including deliveries from sub-suppliers to these units. Ikea has 15,000 employees in Russia.
9. Inditex. Inditex temporarily closed operation of 502 stores. (86 are Zara stores). In addition, the company has suspended e-commerce activity as well. Inditex indicated that Russia accounts for 8.5% of the company’s earnings. A special support plan for employees has been announced for its 9,000 co-workers affected by these closings.
10. Kering. Kering, owner of Gucci, is closing its two stores because of “the current circumstances in the region”.
11. LVMH. LVMH temporarily closed its 124 stores in Russia, again referring to “the current circumstances in the region.” The company also indicated that designers Anna October, Julia Paskel, and Anton Belinskiy will receive financial and operational assistance from management as will all 3,500 employees.
12. Yoox Net-a-Porter Group. Four on-line stores – Net-a-Porter, Mr. Porter, Yoox, and The Outlet have suspended order fulfillment until further notice.
13. Nike. Nike announced the temporary closing of roughly 100 stores, according to Reuters. It includes both owned and operated stores.
14. Puma. Puma deliveries from outside Russia have stopped, but their stores remain open.
15. Richemont. The parent of Cartier and Chloe suspended commercial activity at the dozen stores it operates.
16. Swatch Group. Swiss watchmaker Swatch, owner of such brands as Longines, Blancpain, Harry Winston, Tissot, Omega, and Swatch timepieces has stores in Moscow, St. Petersburg, and Sochi. It has stopped imports into Russia but kept stores open.
17. TJX Companies. TJX has announced plans to sell an investment of $225 million previously made in the Russian apparel maker, Familia, and its chain of off-price stores. It has a 25% non-controlling minority ownership that was at fiscal year-end at $186 million. In addition, 2 TJX senior executives resigned from their directorship positions; the company might have to recognize an investment loss.
· POSTSCRIPT: The reaction across the retail industry has been swift. Maybe the drop of the 30% of the value of the Russian Ruble accelerated the decision to close stores, but in any case, it is laudable that many businesses will continue to pay associates despite the closing of stores. There is grave doubt that all stores will reopen. Continued pressure will likely drive other retailers to reassess their positions in Russia as well.
