Russia Loses On Luxury Brand Presence Due To Ukraine Invasion

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Russia is not only losing energy bigwigs deserting its business there; it is also losing all the bigger international brands that are winding shop from various cities in Russia.

The huge brands have been said to have temporarily closed business and are showing extreme concern about the safety of European nations. The ones to wind up business currently includes Birkin bag maker Hermes and Cartier owner Richemont as the first firms to announce such moves, followed by LVMH, Kering and Chanel as well.

In the understanding of critics, everyone is wishing to withdraw any connection with Russia at the moment. The Ukrainian war has already prompted the United States, Britain and the Europe Union to impose sweeping sanctions on Kremlin.

A formal statement from the luxury giant LVMH has confirmed that they will close their 124 boutiques in Russia from Sunday but will continue to pay the salaries for its 3,500 employees in the country. They own brands like Christian Dior, Givenchy, Kenzo, TAG Heuer and Bulgari among others.

Richemont, which also owns Dunhill, Jaeger-LeCoultre, Montblanc, Piaget, and Van Cleef & Arpels among other brands, has around a dozen directly operated stores, mostly in Moscow. It said in a statement it had suspended commercial activities in Russia on March 3 after stopping Ukraine operations on Feb. 24, the day Russia launched its invasion.

Hermes, which has three stores in Moscow, had planned to open an outlet in St. Petersburg later this year. Business is hitting other luxury segments like watches and cosmetic brands too.

Investment bank Jefferies estimates that Russians account for around $9 billion in annual luxury sales, which is around 6% of Chinese spending and 14% of U.S spending on luxury goods.

Swiss watchmaker Swatch Group, which owns high end watches and jewelry labels including Harry Winston, said it would continue its operations in Russia, but was putting exports on hold “because of the overall difficult situation.”
L'Oreal, LVMH and Kering have all pledged financial support to help Ukrainian refugees and Richemont said on Friday it was initiating a “significant donation” to Medecins Sans Frontieres. 

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