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Uniqlo Owner Backpedals on Russia

Uniqlo parent Fast Retailing walked back Thursday a decision to continue operating in Russia amid a growing tide of criticism that included threats of a boycott on social media and a rebuke from Ukraine’s ambassador to Japan.

The move is an about-face from CEO Tadashi Yanai’s remarks to Nikkei Asia earlier this week that “clothing is a necessity of life” and that people in Russia “have the same right to live as we do.” The Japanese retailer’s biggest rivals, H&M and Zara, shuttered their stores in the Vladimir Putin-helmed nation last week, citing the safety of their employees and their inability to guarantee operational and trade continuity in the face of mounting sanctions. Fast Retailing offered the same reasons for its reversal despite telling Reuters Monday that it had experienced no noticeable impact on its supply chain or logistics.

“While continuing our Uniqlo business in Russia, it has become clear to us that we can no longer proceed due to a number of difficulties…including operational challenges and the worsening of the conflict situation,” Fast Retailing said in a statement. “Therefore, we have decided today to temporarily suspend our operations.”

Fast Retailing, Asia’s largest purveyor of apparel and the world’s fourth-largest after Zara, H&M and Gap, runs 49 Uniqlo stores in Russia, where it said it has made “everyday clothing available to the general public” as “part of our mission.” Last week it announced a donation of $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. Its employees in Europe, too, have been helping deliver clothing and accessories, including Heattech blankets, Heattech innerwear and Airism masks, to refugees, the company said.

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“Fast Retailing is strongly against any acts of hostility. We condemn all forms of aggression that violate human rights and threaten the peaceful existence of individuals,” it added. “Our thoughts are with the people who are suffering today, and we will do whatever we can to support them during these very tragic times. We wish for the return of peace and stability as quickly as possible.”

On Monday, Ukrainian ambassador Sergiy Korsunsky criticized Fast Retailing’s initial decision to stay put, writing on Twitter that Uniqlo “has decided that basic need of [Russians] to have pants and T-shirts [is] more important [than the] basic needs of [Ukranians] to live. What a shame!”

Speaking to Bloomberg on Wednesday, Korsunsky urged companies to exit Russia in protest of its invasion of Ukraine. “Cutting business from Russia is not a loss, it’s an investment,” he added. “If you prove some sacrifice of profit for a period of time, you encourage Russia to become a normal member of nations and you’ll get much more profit in the future.”

Fashion’s exodus from Russia, meanwhile, continues unabated, with Adidas, Crocs, Levi Strauss, Skechers and Calvin Klein and Tommy Hilfiger owner PVH Corp. only the latest to suspend sales in the superpower in recent days. Nike was among the first to close down shops in Russia.

Luxury nameplates such as Balenciaga, Burberry, Cartier owner Richemont, Canada Goose, Chanel, Hermès, LVMH Moët Hennessy Louis Vuitton, Gucci parent Kering and Prada—all favorites of Russian oligarchs—have also followed suit, while TJX, which runs TJ Maxx, Marshalls and HomeGoods, told the Securities and Exchange Commission last week that it will be divesting its equity ownership in the Russian off-price chain Familia “in support of the people of Ukraine.”