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, runs 48 stores and 1,200 employees there.
In March, the company halted deliveries to stores, but has now said it will “leave our Russian franchise altogether” and face £ 31m in costs.
Meanwhile, Nike has not renewed agreements with its largest franchisee in the country.
They are simply the last Western company to close its Russian operations in response to Putin’s barbaric invasion of Ukraine.
Earlier this week, Starbucks closed its entire business in the country and will not retain the opportunity to return.
Marks & Spencer said it was leaving its Russian franchise business as it also warned that sales growth would slow due to the cost of living crisis. Pictured: M&S Moscow store
Nike said on March 3 that it would temporarily cease operations in all of its stores owned and operated by Nike in Russia, and said those still open are run by independent partners.
The head of the Inventive Retail Group (IRG), which operates Nike-branded stores in Russia through its subsidiary Up And Run, said Nike no longer supplies goods to Russia, Vedomosti reported.
“As the supply of goods expires, IRG will be forced to close all its stores under this brand,” IRG President Tikhon Smikov was quoted as saying by Vedomosti.
“We started a joint business in 2012, lovingly built the best chain store in the country and found ourselves 10 years later in a situation where this business cannot exist,” Smikov wrote.
Nike did not respond immediately to a request for comment.
IRG said it could not comment on its relationship with Nike due to contractual issues.
“As you can see from our stores, deliveries have stopped and goods are in short supply,” said an IRG spokesman. “In the current reality, we cannot continue to maintain Nike’s monobrand stores and will be forced to close them.”
Up And Run operates 37 stores across Russia, from St. Petersburg to Novosibirsk, and its website lists 28 of them as still open.
M&S said that the profits for the new financial year will start at a lower level due to the impact of his withdrawal from Russia and the end of the business interest vacation.
He added that he expects this to remain lower throughout the year “given the growing pressure on costs and consumer uncertainty”.
M&S stressed that this weighs on the ability of customers to spend and expects this pressure to “increase” during the year.
“Therefore, we plan to have an adverse effect on volumes due to price inflation, slowing the pace of sales growth,” the company warned.
Trade over the past six weeks has outpaced last year’s levels, driven by strong clothing sales and work at home.
The company added: “Although we are encouraging, we expect the impact of falling real incomes to increase in the second half and continue at least until the rest of the financial year.”
He stressed that he saw no signs of lower inflation at the moment, but believed that the rate of increase in spending – which includes more expensive goods and rising utility costs – would slow by the third quarter.
It was announced on Monday that Starbucks was withdrawing from Russia, following McDonald’s and Coca Cola.
Seattle-based Starbucks has 130 stores in Russia run by licensee Alshaya Group, with nearly 2,000 employees in the country.
The Seattle-based coffee company, which operates 130 cafes in Russia through the Kuwaiti-based franchise operator Alshaya Group, stopped operations for its Russian-based licensees for the first time on March 8.
Starbucks will now close its business altogether and will not retain the opportunity to return.
“As we mentioned on March 8, we have stopped all business in Russia, including the delivery of all Starbucks products,” a new company statement said. “Starbucks has decided to go out and the brand no longer has a market presence.”
Starbucks CEO Kevin Johnson said in early March that he “condemns the horrific attacks on Ukraine by Russia and our hearts are affected.”
The closure will affect nearly 2,000 employees, according to the company. But Starbucks said workers will continue to be paid for six months and will be helped to find new jobs.
Starbucks did not provide details on the financial impact of the release, although it has been a heavy sleigh in Russia for the caffeine supplier from the start.
Initially, they failed to enter the market because Sergei A. Zuikov, a squatter of a trademark, had intellectual property rights over their name.
The Russian lawyer offered to sell their name back for $ 600,000, but the company refused. In 2005, Starbucks eventually won the name back in a civil lawsuit.
The company opened its first store in the Mega Khimki shopping center in September 2007, followed three months later by a second branch in the Arbat district.
Starbucks banned smoking in all of its Russian sites 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 Olympics in Sochi, Russia, there was a secret coffee pavilion set up for NBC television operators, according to the Wall Street Journal.
Starbucks’ decision to close in Russia will be different from the approach taken by some other foreign companies.
McDonald’s, Pepsi and Coca-Cola have announced they will sell their operations in Russia. Fast food companies Pizza Hut, KFC and Taco Bell have ceased operations in the country.
Starbucks closed its 130 outlets in Russia after shutting down in March
Last week, McDonald’s announced it was selling its restaurants in Russia to local licensee Alexander Govor to be rebranded under a new name, but will retain its trademarks while France’s Renault sells its majority stake in Russia’s largest carmaker with the option to buy back quantity
Many other Western companies, including Imperial Brands and Shell, have also severed ties with the Russian market, agreeing to sell their assets in the country or hand them over to local managers.
Companies that stopped doing business in Russia
- Mac Donalds
- KFC
- So Bel
- Pizza Hut
- Cocoa-Cola
- Pepsi
- Starbucks
- Uniqlo
- British American Tobacco
- Ikea
- H&M
- Canadian goose
- Nestle
- Nike
- TJ Max
- Unilever
- BP
- Exxon Mobile
- Shell
- Volvo
- Siemens
- Renault
- Caterpillar
- Delta Air Lines
- United Airlines
- DHL
- Hilton hotels
- Hotels in Hyatt
- american airlines
- Uber
- Sony
- Microsoft
- Apple
- Netflix
- Bloomberg
- Walt Disney
- Warner Brothers
- Imperial brands
McDonald’s said it would take a substantially non-monetary fee 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 worldwide, said it was halting all investment and development of new restaurants in Russia and would donate all profits from operations in Russia for humanitarian efforts.
“Like so many people 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 opposed calls to close restaurants in Russia, which include about 1,000 KFC seats and 50 Pizza Huts.
Most of these sites are managed through franchising or licensing agreements, which can complicate the company’s ability to close them.
Coca-Cola said its business in Russia and Ukraine contributed about 1 to 2 percent of the company’s net operating income in 2021.
“Our hearts are with the people who are suffering the unconscious consequences of these tragic events in Ukraine,” the company said. “We will continue to monitor and assess the situation with the development of circumstances.”
Pepsi has two manufacturing plants in Russia and sells snacks and beverages in the country, according to the latest annual report for 2021.
PepsiCo, whose carbonated beverages were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily essentials, such as milk and other dairy products, baby formula and baby food, in Russia.
“As many of you know, we have been working in Russia for more than 60 years and have a place in many Russian homes,” said PepsiCo CEO Ramon Laguarta in a note to global officials.
“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, seen in one of the first Starbucks to open in Russia, in the Pushkino shopping park near Moscow. The chain closes all places in Russia indefinitely
Coca-Cola, which operates 10 bottling plants in Russia through a licensed partner, said in a statement that it was shutting down all business there. Pictured: Factory in Samara, Russia
McDonald’s, such as Moscow and Russia and Ukraine, account for 9 percent of McDonald’s annual revenue. Now they are closing
Laguarta said PepsiCo is also halting capital investment and all advertising and promotional activities in Russia.
Pepsi has two manufacturing plants in Russia and sells snacks and beverages in the country, according to the latest annual report for 2021.
PepsiCo, whose carbonated beverages were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily essentials, such as milk and other dairy products, baby formula and baby food, in Russia.
“As many of you know, we have been working in Russia for more than 60 years and have a place in many Russian homes,” said PepsiCo CEO Ramon Laguarta in a note to global officials.
“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 …
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