Nike says it will make a complete exit from Russia three months after suspending operations in the country following the country’s invasion of Ukraine.
The US sportswear maker said on March 3 that it would temporarily suspend operations at all of its Nike-owned and operated stores in Russia in response to Moscow’s actions in Ukraine, adding that those still open were operated by independent partners.
On Thursday, it joined other major Western brands such as McDonald’s and Google in confirming it will leave the country altogether.
Foreign companies seeking to exit Russia because of the war in Ukraine face the prospect of new laws being passed in the coming weeks, allowing Moscow to seize assets and impose criminal penalties.
This encouraged some companies to accelerate their exit.
Nike will make a complete exit from Russia three months after suspending operations in the country following the country’s invasion of Ukraine. Pictured: People walk past a closed shop in Saint Petersburg, Russia on May 25, 2022
A woman is sitting looking at her smartphone in front of stores closed due to sanctions in a mall. Popular, luxury and affordable clothing brands, coffee and fast food chains have become unavailable to many Russians
‘NIKE has made the decision to leave the Russian market. Our priority is to ensure that we are fully supporting our employees as we responsibly scale back our operations over the coming months,” the company said in an emailed statement.
For Nike, which gets less than 1% of its revenue from Ukraine and Russia combined, the move is largely symbolic rather than material to its bottom line.
People walk near the Nike store entrance, May 25, 2022 in Moscow, Russia. Nike Inc. with its 116 Russian stores and British retailer Marks and Spencer announced a complete withdrawal from Russia due to Western sanctions following the country’s military invasion of Ukraine
People walk beside a closed McDonald’s restaurant at a mall in Moscow in March after the company announced it would close its stores.
Starbucks closes 130 stores in Russia operated by Kuwait-based licensee Alshaya Group
Companies that have stopped doing business in Russia
- Bell taco
- Pizza Hut
- British American Tobacco
- canada goose
- TJ Max
- Exxon Mobile
- Delta Airlines
- United airlines
- Hilton hotels
- Hyatt hotels
- american airlines
- Walt Disney
- Warner brothers
- Imperial Marks
The company has a history of taking a stand on social and political issues, from supporting football quarterback Colin Kaepernick in his decision to take a knee during the national anthem as a protest against racism, to dismissing Brazilian football star Neymar last year. past because he refused to cooperate. in an investigation into allegations of sexual assault.
Russian media reported in May that Nike did not renew agreements with its largest franchisee in Russia, Inventive Retail Group (IRG), which operates 37 Nike-branded stores in Russia through its subsidiary Up And Run.
Nike stock rose nearly 1% in US premarket trading.
Western brands are moving out of Russia from shopping malls in Moscow and St. Petersburg to become ‘ghost towns’ with empty street venues – in protest against the war in Ukraine that began on February 24.
The changes were prompted by Western sanctions and an unprecedented massive withdrawal of Western companies that had taken root in Russia’s everyday life landscape over three decades.
Dozens of foreign and international companies withdrew from the country, leaving behind half-empty malls and closed doors in places that once swarmed with customers.
Popular clothing brands, both luxury and affordable, coffee and fast-food chains have become unavailable to many Russians.
Luxury brands such as France’s Chanel and Louis Vuitton have announced they are suspending operations in Russia, adding to the country’s economic isolation imposed by the West in response to the invasion.
Spanish fashion retailer Inditex, which owns Zara, halted trading in Russia in March, closing its 502 stores and halting online sales.
Prada, Dior, Louis Vuitton, Gucci and Fendi were among those that emptied their shelves in the Russian capital’s luxury malls as sanctions began to weigh.
American food and beverage giants including Coca-Cola, Pepsi and Starbucks have halted or closed operations in Russia in the face of Western sanctions.
Corporations from British energy giants Shell and BP to French carmaker Renault withdrew from Russia, hurting their bottom line as they tried to sell their stakes there.
Yum Brands, which operates the KFC, Pizza Hut, Taco Bell, The Habit Burger Grill and WingStreet brands worldwide, said it is suspending all investment and development of new restaurants in Russia and will donate all profits from operations in Russia. Russia to humanitarian efforts.
Other major US companies that have recently announced their intention to leave Russia include Nissan, Levi Jeans, Visa and Mastercard.
McDonald’s closed all 850 of its restaurants in the country in March – where it says it employs 62,000 people – including its iconic location in Pushkin Square, the latest company to close its Russian business amid Western sanctions.
People walk past a Zara store closed due to sanctions in a shopping mall in St Petersburg. Spanish fashion retailer Inditex, which owns Zara, broke off negotiations in Russia in March
A food delivery boy rides a bicycle past the GUM department store with a Cartier boutique closed due to sanctions in Moscow. Prada, Dior, Louis Vuitton, Gucci and Fendi were among those that emptied their shelves in the luxury malls of the Russian capital.
The company said it would look for a Russian buyer to hire its employees and pay them until the sale is closed. Did not identify a potential buyer. McDonald’s said it plans to begin removing golden arches and other symbols and plaques bearing its name.
As part of the exit, McDonald’s expects to post a non-cash expense of about $1.2 billion to $1.4 billion.
“The humanitarian crisis caused by the war in Ukraine and the precipitous unpredictable operating environment led McDonald’s to conclude that continued ownership of the business in Russia is no longer sustainable,” it said in a statement.
The first McDonald’s in Russia opened in mid-Moscow more than three decades ago, right after the fall of the Berlin Wall.
Estée Lauder and IBM have also decided to leave Russia – but large international companies such as Reckitt, Unilever and British American Tobacco remain.
A woman walks through an almost empty mall with many stores closed due to sanctions. Dozens of foreign and international companies withdrew from the country, leaving behind half-empty malls and closed doors in places that once swarmed with customers.
Other companies have also decided to stay, with some facing setbacks.
HSBC has a small presence in Russia “with no plans to change anything at the moment”, while pharmaceutical company AstraZeneca said its role in helping doctors provide essential care is “more urgent than ever”. Rival GSK said it will also stay.
Japanese fashion retailer Uniqlo will remain in Russia because its boss believes “clothes are a necessity of life”, while AB InBev, which owns Stella Artois, said it would continue to operate through a local subsidiary.
And earlier this year, French automaker Renault announced that it had turned over its Russian assets to the government in Moscow, marking the first major nationalization of economic clearance.
Russian officials said they were ready to nationalize foreign assets – as Renault did – and some officials assured Russians that their favorite brands would have domestic alternatives.
Officials in Moscow have tried to downplay the severity of Western sanctions, promising that Russia will adapt and take steps to stop the flight of foreign currency and capital.