The fallout from Russia’s large-scale invasion of Ukraine continues to mount as Chanel, Nike, Hermès, Richemont and Ikea—and most recently Inditex, the world’s largest apparel retail by revenue—shutter stores in the Eurasian nation, and TJX looks to sell its stake in the local retailer Familia.
Inditex revealed Saturday morning that it’s temporarily pausing operations at 502 of its stores in Russia, 86 of which are Zara, plus e-commerce in the country, because it “cannot guarantee the continuity of operations and trading conditions” under “current circumstances.”
Russia, Inditex said, accounts for roughly 8.5 percent of the company’s earnings before interest and tax, and that the total investment in the superpower, given that all locations are leased, is “not financially significant.”
”Inditex continues to prioritize its workforce of more than 9,000 people, with whom it is going to develop a special support plan from now on,” the company added.
Hermès said Friday that it will temporarily board up its three stores in Moscow. “It is with regret that we have taken the decision to temporarily close our stores in Russia and pause all our commercial activities from the evening of March 4th,” the luxury house wrote in a LinkedIn post, providing no further details.
Chanel headed to LinkedIn as well to make a similar proclamation. “Given our increasing concerns about the current situation, the growing uncertainty and the complexity to operate, Chanel decided to temporarily pause its business in Russia,” it said Friday. “We will no longer deliver into Russia, we will close our boutiques and we already suspended our e-commerce.”
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“The safety of our employees is our priority and we remain closely connected to our local teams whom we will continue to support,” added French firm, which said Thursday that it would be making an “immediate” donation of 2 million euros ($2.19 million) to Care and the United Nations High Commissioner for Refugees, (UNHCR). Fondation Chanel, its philanthropic arm, will also work closely with its local partners to provide “future critical support” to women and children affected by the “evolving situation.”
Cartier and Chloé parent Richemont also said Friday that it has suspended commercial activities at the dozen or so stores it operates in Russia after doing the same in Ukraine last week. It added in a statement that it will be making a ”significant donation” to Doctors Without Borders, though it didn’t specify how much.
Burberry told Vogue Business that it has frozen shipping to Russia because of “operational challenges,” though it is monitoring the quickly changing situation. Italian brand Golden Goose also told the outlet that it had also suspended shipping to the superpower as a result of trade restrictions. Deliveries to Russia from Farfetch, Mytheresa and Matchesfashion, per their websites, are likewise verboten for the moment.
LVMH Moët Hennessy Louis Vuitton and Kering, the world’s largest luxury conglomerates by sales, followed suit late Friday. LVMH will temporarily close its 24 doors in Russia from Sunday because of the “current circumstances in the region,” while Gucci owner Kering said it was doing the same with its two stores because of “growing concerns regarding the current situation in Europe.”
Just one week into Russia’s assault, Nike said Thursday that it would temporarily close all its stores in Russia, according to Reuters. According to its online store directory, the company has roughly 100 stores in the country.
The move came days after a note appeared on Nike’s Russian site announcing the company could no longer guarantee delivery of goods to its customers in the country. As a result, it said it was making merchandise purchases on Nike.com and the Nike app unavailable in the region. At the time, the note advised Russian citizens to visit their nearest Nike store. That sentence has since been removed from the message.
Ikea also unveiled store closure plans Thursday. Ingka Group, an Ikea franchisor that represents about 90 percent of Ikea retail sales, paused all Ikea Retail operations in Russia. The company’s Mega shopping centers, however, will remain open “to ensure that the many people in Russia have access to their daily needs and essentials such as food, groceries and pharmacies.”
“The war has had a huge human impact already,” Ikea said. “It is also resulting in serious disruptions to supply chain and trading conditions. For all of these reasons, the company groups have decided to temporarily pause Ikea operations in Russia.”
As part of its broader set of actions related to the war, Inter Ikea Group, the owner of the Ikea concept and worldwide Ikea franchisor, halted all export and import in and out of Russia and its ally Belarus. The company also paused all Ikea Industry production operations in Russia, including all deliveries from sub-suppliers to these units.
Ikea said these decisions will have a “direct impact” on 15,000 Ikea employees. “The ambitions of the company groups are long term and we have secured employment and income stability for the immediate future and provide support to them and their families in the region,” Ikea said.
Like an increasing number of retailers and brands—including Balenciaga, Burberry, Gucci, Keen Footwear, Adidas and Mango—Ikea is donating money to support humanitarian efforts. These donations include 20 million euros, about $21.8 million, for those who have been displaced as a result of the conflict in Ukraine. Additionally, Inter Ikea Group and Ingka Group are each granting 10 million euros, roughly $10.9 million, to provide support in products and other assistance to UNHCR, Save the Children and other organizations working in the local markets.
“The situation is extremely critical and fast moving,” Ikea said. “The company groups are dedicated to navigate in this reality, with the best interest of people as the highest priority.”
TJX, the owner of TJ Maxx, Marshalls and HomeGoods, is also distancing itself from Russia. On Wednesday, it alerted the Securities and Exchange Commission that it would divest its equity ownership in the Russian off-price chain Familia “in support of the people of Ukraine.” TJX itself does not have any sales in Russia or Ukraine.
The company had originally invested $225 million for a 25 percent non-controlling, minority interest in the privately held enterprise in November 2019. As a result of its commitment to divest, TJX said it might recognize an investment loss when its Familia position is sold. It also may be required to record an impairment charge if the fair value of its investment declines below its carrying value on the balance sheet, it added. As of Jan. 29, the carrying value was $186 million, a reflection of “the revaluing of the investment from Russian rubles to the U.S. dollar.”
As of March 2, TJX senior executive vice presidents Doug Mizzi and Scott Goldenberg had resigned from their director and observer positions, respectively, on Familia’s board of directors, TJX said.
Minimalist, meanwhile, is pledging 30 percent of its proceeds to the Red Cross and UNICEF in Ukraine while also offering customers an extra 10 percent off when they use the code “TOGETHER.” The circular fashion brand’s founder, Tamara Davydova, was born, raised and married in Kyiv.
“It’s been devastating watching the war unfold,” Davydova wrote in a letter to friends and clients. “To date my loved ones have stayed safe–but thousands have not been so lucky and millions are fleeing the violence. I’m trying to do what I can to support organizations in Ukraine helping women and children affected by senseless violence.”
Canada Goose announced Wednesday that it was donating 100,000 Canadian dollars, about $78,300, to UNHCR and suspending all wholesale and e-commerce sales to Russia “in light of the challenged operating environment and evolving sanctions against Russian interests.” None of the brand’s retail locations have been impacted by the conflict, it said.
LVMH on Wednesday said it is offering “essential financial and operational assistance” to its 150 employees in Ukraine and donating 5 million euros, or $5.46 million, to the International Committee of the Red Cross. Ganni, the Copenhagen cool-girl brand, wrote on Instagram that it’s “freezing all trade with Russia” and donating 100,000 krone, or $14,600, to the Danish Refugee Council’s on-the-ground efforts in Ukraine.
Uniqlo parent Fast Retailing on Friday said it’s donating $10 million to the UNHCR; 100,000 items including Uniqlo clothing, blankets, face masks and other essentials; and 100,000 clothing items collected through in-store recycling programs for Ukrainian refugees in Poland and elsewhere.
The past week has seen numerous other brands and retailers shutter online and/or physical stores in Russia, including H&M, Yoox Net-a-Porter Group, Asos and Mango. Puma said Wednesday that deliveries to the country had stopped, but stores remained open. Maersk, Mediterranean Shipping Company and CMA CGM have suspended new Russia bookings, with some exceptions for food and humanitarian aid. UPS and FedEx have suspended services in both Russia and Ukraine.
Additional reporting by Jessica Binns and Jasmin Malik Chua.