Foreign companies in non-food retail that withdrew from Russia or halted operations in the country during the past year have missed out on roughly $2 billion in profits, business daily Kommersant reported on Thursday, citing consultants who assisted with the exit of several businesses.
According to the news outlet, losses for companies that sold their Russian assets and quit the country entirely amounted to $1.3-1.5 billion. Among the biggest losers were Swedish furniture giant IKEA, which lost roughly $400 million, and clothing brand H&M, which lost some $363 million.
Spanish clothing conglomerate Inditex, the owner of brands such as Zara, Bershka, and Massimo Dutti, suffered about $300 million in losses. French sporting goods retailer Decathlon endured losses of around $140 million, while luxury Italian retailer Moncler and French counterpart Hermes jointly lost around $200 million.
Among the companies which have suspended their activities in Russia but have not yet finalized their intentions to leave, losses were estimated at $500-$700 million. Japanese clothing manufacturer Uniqlo could suffer the most, sources told Kommersant, given that the company had seen Russia sales grow exponentially in recent years, reaching 26.9 billion rubles ($333 million) in revenue in 2021, up 35% compared to 2020 and 38% compared to 2019.
Companies that have exited Russia in the past year have largely linked their decisions to Western sanctions, which have made it difficult to continue operations due to logistics and supply chain problems.
While sanctions have formally had almost no effect on non-food retail, with the exception of luxury goods, numerous brands have said they feared for their public image or faced difficulties organizing their operations under financial restrictions.
Experts note that many of the brands that left the Russian market did not consider the country a priority. According to Dmitry Vodyannikov from consultancy firm Yakov & Partners, the Russian market provided most of the brands in the segment with only 3-5% of their global revenues.
Overall, according to calculations by the Center for Strategic Research (CSR), as of October last year, foreign companies of all types that have restricted their activities in Russia or announced their withdrawal had lost $200-240 billion.
Russian President Vladimir Putin has stated that companies that quit Russia had left behind a “good legacy,” and vowed not to let their various assets and infrastructure go to waste.
“Our companies, our entrepreneurs are picking up these enterprises and businesses and continuing this work. And quite successfully,” Putin said at a meeting with the Agency for Strategic Initiatives in February.
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