June 24, 2024

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No IKEA shelves, no Levi’s: Western retail exit from Russia continues

No IKEA shelves, no Levi's: Western retail exit from Russia continues

However, not all workers in the industry leave Russia.

Speaking ahead of his Fall 2022 show in Paris, designer Rick Owens said he didn’t quite know what to do, but didn’t think the Russian people “deserve to be punished.”

Uniqlo, owned by clothing giant Fast Retailing, plans to Keeping its Russian stores openalong with its founder, Tadashi Yanai, told a Japanese newspaper: “Clothes are a necessity for life. The people of Russia have the same right to live as we do.”

Experts predict that the void left by Western retail companies will be filled by China, which is likely to serve and benefit from the needs of Russia’s middle class in the short term. Some non-Russian retailers may route their goods through China to bypass Europe.

“China is quite capable of emulating brands, even IT brands, and it is an economy that has grown exponentially,” said Milovanov, a former Minister of Economic Development of Ukraine. People may be “kind of upset” that they can’t get US and European brands, but they’ll likely stick to what they have and hope they can travel to buy such goods in the future, he said.

For most American and European retailers, their business in Russia is not so large that its loss will leave a significant impact on profits. Levi, for example, He just said that 4 percent of its net sales came from Eastern Europe, and only half of that was related to Russia. Stanley Black & Decker said its sales and inventory in Russia indicated that the conflict was not a “significant risk” to the company. At Dries Van Noten, where Axel Keeler, head of the brand, said they had halted deliveries to Russia, Ukraine and Russia and Belarus together with just 6 percent of revenue.

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Townsend of Wiggin and Dana said companies that want to return to doing business in the country “don’t want to offend Russian sensibilities.” But, she added, “For many companies, the market outside Russia is more important than the market inside Russia, and they want to be on the right side of the ethical decision.”

Contact Sapna Maheshwari at [email protected] or Vanessa Friedman at [email protected].