No Ikea shelves, no Levis: Western retail exodus from Russia is underway
Yet not everyone in the industry is leaving Russia.
Speaking ahead of his Fall 2022 show in Paris, designer Rick Owens said he wasn’t quite sure what to do, but he didn’t think the Russian people ‘deserved to be punished’ .
Uniqlo, owned by clothing giant Fast Retailing, plans to keep its Russian stores open, with founder Tadashi Yanai telling a Japanese newspaper: “Clothing is a necessity of life. The Russian people have the same right to live as we do.
Experts predict that the void left by Western retail will be filled by China, which should work to meet the needs of Russia’s middle class and benefit from it in the short term. And some non-Russian retailers may route their goods through China to bypass Europe.
“China is perfectly capable of imitating brands, even IT brands, and it’s a very developed economy,” said Mylovanov, who is also a former economic development minister in Ukraine. People may be “sort of annoyed” that they can’t get American and European brands, but they’ll likely keep what they own and hope to be able to travel to buy such products in the future, he said. .
For most US and European retailers, their business in Russia is not so big that losing it will leave a big dent in profits. Levi’s, for example, said only 4% of its net sales came from Eastern Europe, and only half was from Russia. Stanley Black & Decker said its sales and inventory in Russia suggested the dispute was not “a big risk” for the company. At Dries Van Noten, where Axel Keller, the brand’s president, said he suspended deliveries to Russia, Ukraine, Russia and Belarus together account for only 6% of turnover.
Companies wanting to start doing business in the country again “don’t want to offend Russian sensibilities,” Wiggin & Dana’s Ms Townsend said. 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 moral decision.”