Marks & Spencer and Nike have become the last major Western companies to withdraw from Russia in response to Putin’s barbaric invasion of Ukraine.
The iconic British retailer, run by Turkish franchisees in Russia, operates 48 stores and 1,200 employees.
In March, the company stopped shipments to stores, but has now said it will “completely abandon our Russian franchise” and face a cost of £ 31 million as a result.
Meanwhile, Nike has not renewed agreements with its largest franchisee in the country.
They are just the latest Western company to shut down its Russian operations in response to Putin’s barbaric invasion of Ukraine.
Earlier this week, Starbucks closed its business completely in the country and will not retain the option to return.
Marks & Spencer said it will abandon its franchise business in Russia, as it also warned that its sales growth will slow due to the cost-of-living crisis. In the photo: M&S Moscow store
Nike said on March 3 it would temporarily suspend operations at all of its stores owned and operated by Nike in Russia and said those still open are run by independent partners.
The head of Inventive Retail Group (IRG), which operates Nike-branded stores in Russia through its subsidiary Up And Run, said Nike no longer supplies products in Russia, Vedomosti reported.
“As supplies of goods run out, IRG will be forced to close all its stores under this brand,” Vedomosti was quoted as saying by IRG President Tikhon Smykov in a letter to employees.
“We started a joint business in 2012, lovingly built the best store chain in the country and ended up 10 years later in a situation where this business cannot exist,” Smykov wrote.
Nike did not immediately respond to a request for comment.
IRG said it could not comment on its relationship with Nike due to contractual issues.
“As you can see in our stores, deliveries have stopped and goods are scarce,” an IRG spokesman said. “In the current realities, we can’t continue to support the operation of Nike single-brand stores and we will be forced to close them.”
Up And Run operates 37 stores all over Russia, from St. Petersburg to Novosibirsk, and includes 28 still open on its website.
M&S said the benefits for the new year will start at a lower level due to the impact of its withdrawal from Russia and the end of the holiday tariff holiday.
He added that he expects this to remain lower throughout the year “given the growing cost pressures and consumer uncertainty.”
M&S stressed that this is affecting customers’ spending capacity and expects this pressure to “increase” further this year.
“Therefore, we are planning an adverse impact on volumes due to price inflation, slowing the pace of sales growth,” the company warned.
Trade over the past six weeks has advanced to last year’s levels, driven by strong sales in its clothing and home operations.
The company added: “While it is encouraging, we expect the impact of declining real incomes to intensify in the second half and to continue at least for the rest of the year.”
He stressed that he currently sees no sign of a reduction in inflation, but believes that the rate of growth in costs, which includes more expensive goods and rising utility costs, will fall in the third quarter.
On Monday, it was announced that Starbucks was retiring from Russia, after McDonald’s and Coca Cola.
Seattle-based Starbucks has 130 stores in Russia, run by its licensed Alshaya Group, with nearly 2,000 employees in the country.
The Seattle-based coffee company, which operates 130 coffee shops in Russia through the Kuwait-based franchise operator Alshaya Group, suspended for the first time the operations of its Russian-based licensees on March 8.
Starbucks will now close its business completely and will not retain the option to return.
“As we mentioned on March 8, we have suspended all commercial activity in Russia, including the shipment of all Starbucks products,” the company said in a new statement. “Starbucks has made the decision to go out and stop having a brand presence in the market.”
Starbucks CEO Kevin Johnson said in early March that he “condemns the horrific attacks on Ukraine by Russia and our hearts go out to all those affected.”
The closures will affect about 2,000 employees, according to the company. But Starbucks said workers will continue to be paid for six months and will receive help finding new jobs.
Starbucks did not provide details on the financial impact of the exit, although it has been a tough sleigh in Russia for the caffeine supplier from the start.
At first, they were unable to enter the market because Sergei A. Zuykov, a registered trademark occupant, had the intellectual property rights in his name.
The Russian lawyer offered to sell them his name for $ 600,000, but the company refused. In 2005, Starbucks finally won the name in a civil case.
The company opened its first outlet at Mega Khimki Mall in September 2007, followed three months later by a second branch in Arbat District.
Starbucks banned smoking at all of its Russian outlets in 2011, three years before smoking was banned in public places in the rest of the country.
Although the company was not an official sponsor of the 2014 Olympic Games in Sochi, Russia, there was a secret coffee kiosk for NBC broadcasters, according to the Wall Street Journal.
Starbucks’ decision to suspend operations in Russia will be different from the approach taken by other foreign companies.
McDonald’s, Pepsi and Coca-Cola have announced that they will sell their operations in Russia. Fast food companies Pizza Hut, KFC and Taco Bell have halted operations in the country.
Starbucks closes its 130 outlets in Russia after suspending operations in March
Last week, McDonald’s said it was selling its restaurants in Russia to its local graduate Alexander Govor to change its name to a new name, but will retain its trademarks, while French Renault sells its majority stake in the Russia’s largest carmaker with an option to repurchase the stake.
A large number of other Western companies, including Imperial Brands and Shell, are also severing ties with the Russian market by agreeing to sell their assets in the country or hand them over to local managers.
Companies that stopped doing business in Russia
- McDonald’s
- KFC
- Taco Bell
- Pizza Hut
- Cocoa-Cola
- Pepsi
- Starbucks
- Uniqlo
- British American Tobacco
- Ikea
- H&M
- Canada Goose
- Nestlé
- Nike
- TJ Max
- Unilever
- BP
- Exxon Mobil
- Shell
- Volvo
- Siemens
- Renault
- Caterpillar
- Delta Air Lines
- United Airlines
- DHL
- Hilton Hotels
- Hyatt Hotels
- American Airlines
- Uber
- Sony
- Microsoft
- apple
- Netflix
- Bloomberg
- Walt Disney
- Warner Brothers
- Imperial Marks
McDonald’s had said it would take on a mostly non-cash charge of up to $ 1.4 billion.
In a statement to DailyMail.com on Tuesday, Yum Brands, which operates KFC, Pizza Hut, Taco Bell, The Habit Burger Grill and WingStreet brands worldwide, said it was suspending all investment and development of new restaurants in Russia. and that it will give all the benefits of operations in Russia to humanitarian efforts.
“Like many around the world, we are shocked and saddened by the tragic events unfolding in Ukraine,” a Yum Brands spokesman said.
But so far, the company has resisted calls to close restaurants in Russia, which include about 1,000 KFC locations and 50 Pizza Huts.
Most of these locations operate through franchise or license agreements, which can complicate the company’s ability to close them.
Coca-Cola said its business in Russia and Ukraine accounted for 1 to 2 percent of the company’s net operating income in 2021.
“Our hearts are on the people who are suffering the inconceivable effects of these tragic events in Ukraine,” the company said. “We will continue to monitor and assess the situation as circumstances evolve.”
Pepsi has two production plants in Russia and sells snacks and drinks in the country, according to its most recent annual report for 2021.
PepsiCo, whose soft drinks were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily commodities such as milk and other dairy products, infant formula and baby food. babies, in Russia.
“As many of you know, we have been operating in Russia for over 60 years and have a place in many Russian houses,” PepsiCo CEO Ramon Laguarta said in a note to global employees.
“However, given the horrific events in Ukraine, we are announcing the suspension of the sale of Pepsi-Cola and our global beverage brands in Russia, including 7Up and Mirinda,” he continued.
The Starbucks logo was seen in one of the first Starbucks to open in Russia, in the Pushkino shopping park outside Moscow. The chain closes all locations in Russia indefinitely
Coca-Cola, which operates 10 bottling plants in Russia through a licensed partner, said in a statement that it is suspending all business there. In the photo: plant in Samara, Russia
McDonald’s, like this one in Moscow, and in Russia and Ukraine account for 9 percent of McDonald’s annual revenue. Now they close
Laguarta said PepsiCo will also suspend capital investments and all advertising and promotional activities in Russia.
Pepsi has two production plants in Russia and sells snacks and drinks in the country, according to its most recent annual report for 2021.
PepsiCo, whose soft drinks were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily commodities such as milk and other dairy products, infant formula and baby food. babies, in Russia.
“As many of you know, we have been operating in Russia for over 60 years and have a place in many Russian houses,” PepsiCo CEO Ramon Laguarta said in a note to global employees.
“However, given the horrific events in Ukraine, we are announcing the suspension of the sale of Pepsi-Cola and our global beverage brands in Russia, including 7Up and Mirinda,” he continued.
Laguarta …