While the shops in Moscow’s Awijapark shopping center are bustling with activity these days, Ikea only sells online.
(Photo: AP)
Moscow H&M and Ikea are clearing their warehouses in Russia, the sale started this week. The Swedish textile retailer and multinational furniture retailer are now conducting business in Russia, which they paused following the Russian invasion of Ukraine. Layoffs have been announced, but both companies have not yet given any specific figures.
H&M only said on Tuesday that 6,000 employees would be affected by the company’s withdrawal from Russia. Ikea said in June many would lose their jobs and promised to continue paying wages for six months. This week, Ikea said it has 15,000 employees in Belarus and Russia. Buyers were being sought for four furniture factories in Russia, it said in June, and shopping and logistics centers in Moscow and Minsk were closed.
While the H&M stores in Moscow’s Aviyapark shopping center are bustling with activity these days, Ikea only sells online. The shelves in Moscow’s H&M store were still well stocked, while stores from Zara, Oyshi, Bershka, Pull&Bears and Uniqlo were closed. Other New Yorker, Finn Flare, Marks & Spencer and Mango stores were open.
“I’ll be looking at Russian brands soon,” said one H&M customer, who declined to use her first name, Anja, on Tuesday. Another customer, Leonid, said he was very upset that H&M was leaving.
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Many Western companies have announced their exit from Russia because of the Russian war of aggression in Ukraine. McDonald’s has sold its 850 restaurants to a Russian entrepreneur who wants to reopen them under the name “Vkusno-i Tochka” (“Tasty and Ready”). Energy companies Shell and BP are taking billions in costs to end their investments and holdings in Russia.
H&M estimates the equivalent of around 193 million euros for the abandonment of its Russian business, which should be noted as one-off costs in the report for the third quarter.
But there are also Western companies that want to stay in Russia or at least partially continue their business activities. These include, for example, the French hardware store chain Leroy Merlin, which continues to operate twelve stores, while Pepsico, Nestlé and Johnson & Johnson only continue to deliver essential goods such as medicines and baby food.
More: Putin makes it difficult for foreign companies to exit business with Russia