No Ikea Shelves, No Levis: The Retail Exodus From Russia Is On
Still, not everyone in the industry is leaving Russia.
Speaking before his fall 2022 show in Paris, the designer Rick Owens said that he hadn’t fully figured out what to do, but that he did not think the Russian people “deserved to be punished.”
Uniqlo, owned by the clothing giant Fast Retailing, plans to keep its Russian stores open, with its founder, Tadashi Yanai, telling a Japanese newspaper: “Clothing is a necessity of life. The people of Russia have the same right to live as we do.”
Experts anticipate that the void left by Western retail businesses will be filled by China, which is likely to work to cater to Russia’s middle class and benefit in the short term. And some non-Russian retailers may route their goods through China to bypass Europe.
“China is perfectly capable of mimicking brands, even I.T. brands, and it’s a greatly grown economy,” said Mr. Mylovanov, who is also a former minister of economic development in Ukraine. People may be “sort of annoyed” that they can’t get American and European brands, but they’ll likely hang on to what they own and hope that 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 big that its loss will leave a major dent in earnings. Levi’s, for example, said that only 4 percent of its net sales came from Eastern Europe, and that only half of that was tied to Russia. Stanley Black & Decker said its sales and inventory in Russia suggested that the conflict wasn’t “a big risk” for the company. At Dries Van Noten, where Axel Keller, the brand’s president, said they had paused deliveries to Russia, Ukraine, Russia and Belarus together account for just 6 percent of revenue.
Companies that want to return to doing business in the country “don’t want to offend Russian sensibilities,” Ms. Townsend of Wiggin & Dana said. But, she added, “for many companies, the market outside of Russia is more important than the market inside Russia, and they want to be on the right side of the moral decision.”
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