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Nike Cuts Ties With Russian Franchisees

Nike and Marks & Spencer (M&S) appear to be exiting Russia.

Nike has declined to renew its franchise agreement with its largest Russian franchisee Inventive Retail Group, Vedomosti reported Wednesday. The Moscow-based daily, citing the Russian government’s intellectual property agency Rospatent, said Nike’s agreement with IRG subsidiaries Up and Run and A3 Sport will expire Thursday. A similar agreement with the Siberian-focused franchisee Yar LLC is also set to expire Thursday, Vedomosti said.

The Swoosh brand was one of the first to suspend online sales in Russia following the country’s invasion of Ukraine. A note published to its Russian e-commerce site’s front page told visitors the company “could no longer guarantee delivery of goods to its customers in the country.”

According to Vedomosti, IRG president Tikhon Smykov told employees that Nike could not “in the foreseeable future” ship goods to Russia. With no remaining inventory to sell, the company “will be forced to close all of its stores under this brand,” he added.

Reuters reported Wednesday that it had visited three Nike stores this month, including the brand’s flagship location in central Moscow, and all were operating as usual.

In early March, when Nike originally suspended its Russian e-commerce site, the company’s store directory listed 119 locations in the Russia Federation. As of Wednesday, that number had fallen to 56, including 19 which are “temporarily closed.” All 37 locations that have retained normal business hours—and one which is temporarily closed—are described as “partnered” stores.

IRG’s site lists 37 locations on its Nike store directory, nine of which include a note saying the store is “temporarily closed.” Six of these shuttered locations are listed as open on Nike’s website, while another three do not appear on the list at all. Six stores are listed on Nike’s directory, but not on IRG’s site, including three in Siberia.

Neither Nike nor IRG responded to a request for comment.

As of Wednesday, Nike’s Russian site still told visitors that purchases on Nike.com and the Nike app were “temporarily unavailable in this region.” A “help” section described official Nike stores and Nike-operated stores as “temporarily closed.” The company’s return policy said customers looking to return an item to an official Nike store will be able to do so “within 60 days of the store’s reopen date.”

Earlier this month, the Russian football team FC Spartak Moscow announced Nike had terminated their 17-year-long relationship. The public note attributed the move to the UEFA’s decision to exclude the club from next season’s European competitions. Spartak said management was looking for a new equipment supplier.

M&S is also pulling out of Russia, it confirmed Wednesday in its full-year earnings report. The company originally ceased shipments to the country on March 3, it said. Since then, it has decided to “fully exit” its Russian franchise. The retailer’s full exit from Russia, plus business disruption in Ukraine, cost the company 31 million pounds ($38.9 million), it said.

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