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Risky Russia: Levi’s Pulls Back as Uniqlo Owner Doubles Down

Levi Strauss is suspending its commercial operations in Russia including any new investments, as the humanitarian crisis in Ukraine continues to spiral.

The denim giant, whose jeans were a symbol of Western freedom in Communist Europe during the Cold War, said Monday that it made the move in part as a response to the “enormous disruption” occurring in the region, which has made “normal business untenable.” In 2021, Levi’s derived roughly 4 percent of its total net revenues from Eastern Europe. Half of that, it said in a release, related to Russia.

“But any business considerations are clearly secondary to the human suffering experienced by so many,” it said. “The LS&Co. community continues to be saddened by the devastating conflict in Ukraine and our thoughts are with all of those who have been affected, including our employees, partners and their loved ones.”

Levi’s, which posted in January a 22 percent bump in fourth-quarter revenue despite supply-chain snarls, said that it will be donating more than $30,000 to nonprofits providing aid to those caught in the middle of the ongoing conflict, including Care and the International Rescue Committee. The company is also offering employees a two-to-one match, up to $200,000, for donations to a raft of organizations that are assisting the most vulnerable communities, including those facing discrimination at border crossings.

“LS&Co. and its licensee partners are also working to donate jackets, backpacks and warm clothing to people who have been displaced from their homes,” it said.

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As Levi's suspends its commercial operations in Russia, it's business as usual for Uniqlo owner Fast Retailing.
A group of boys walk past the Levi’s store on Union Square in San Francisco, Tuesday, April 10, 2007. AP Photo/Eric Risberg

Fast Retailing, in contrast, plans to keep its 49 stores in Russia open, making the Uniqlo owner one of the few international outliers that are staying put despite mounting public pressure for businesses to boycott the Vladimir Putin-helmed nation for invading its smaller neighbor.

Speaking to Nikkei Asia Monday, CEO Tadashi Yanai defended the decision, calling clothing a “necessity of life” and saying that people in Russia “have the same right to live as we do.”

“There should never be war. Every country should oppose it,” he added. “This time all of Europe clearly opposes the war and has shown its support for Ukraine. Any attempt to divide the world will, on the contrary, strengthen unity.”

A spokesperson told Reuters that the Japanese retailer has experienced no noticeable impact on its supply chain or logistics, despite large shipping firms such as Maersk suspending freight services to and from Russia.

Fast Retailing revealed last week that it is donating $10 million to the United Nations High Commissioner for Refugees to provide shelter, aid and other urgent support to affected populations in Ukraine and the countries to which they have been forced to flee. More than 1.7 million Ukrainians have fled to Central Europe since the conflict began on Feb. 24, the agency said, with the number potentially rising up to 4 million if Russia’s bombardment doesn’t let up.

The company will also donate 100,000 pieces of Uniqlo clothing and accessories, including Heattech blankets, Heattech innerwear and Airism masks, along with 100,000 items of winter clothing collected at Uniqlo’s Japanese stores through its clothing recycling program. These items, it said, will be distributed to refugees in Poland and other countries.

Two of Fast Retailing’s biggest high-street rivals have pulled out of Russia. H&M said last week that it has temporarily paused all sales at its 155 doors in Russia following the closures of its stores in Ukraine for the “safety of customers and colleagues.” Inditex announced Saturday that it’s suspending operations at 502 of its stores in Russia, 86 of which are Zara nameplates, plus e-commerce in the country, because it “cannot guarantee the continuity of operations and trading conditions” under “current circumstances.”

In the luxury space, Prada joined Chanel, Kering LVMH Moët Hennessy Louis Vuitton and others in freezing its Russian retail operations. “Our primary concern is for all colleagues and their families affected by the tragedy in Ukraine, and we will continue to support them,” it said in a brief statement Sunday. “The group will continue to monitor further developments.”