MOSCOW – Russians are snapping up Western fashion and furniture this week as H&M and IKEA sell off the last of their stock in Russia and continue their exit from the country after it sent troops to Ukraine.
Sweden-based H&M and Netherlands-based IKEA had paused sales in Russia after the military operation began and are now trying to offload their clothing and furniture stocks as they wind down operations there, saying the future is unpredictable. IKEA’s sales are online only, while the H&M store at Moscow’s Aviapark mall saw a steady stream of young shoppers on Tuesday.
The places and shelves were well filled in the clothing store. Nearby stores were closed, including Zara, Oysho, Bershka, Pull&Bear and Uniqlo, while New Yorker, Finn Flare, Marks & Spencer and Mango were open.
“I’m going to start looking at Russian brands,” said one H&M shopper, who gave only her first name, Anya, after coming out of the store. Another shopper, who gave his name only as Leonid, said he was “very hurt” by H&M closing: “A good store is leaving.”
Both companies are laying off staff as they reduce operations in Russia. H&M said on Tuesday that 6,000 workers will be affected and that it is working on details to offer continued support in the coming months.
People queue to enter an H&M store and buy goods sold at the Aviapark shopping center in Moscow, Russia, August 9, 2022.
IKEA said in June that many workers will lose their jobs and it has guaranteed them six months’ pay, as well as basic benefits. It said this week it has 15,000 workers in Russia and Belarus, but it did not immediately confirm how many would be laid off.
“We are deeply saddened by the impact this will have on our colleagues and very grateful for all their hard work and commitment,” H&M Group CEO Helena Helmersson said last month.
Many Western companies vowed to leave Russia after it sent troops to Ukraine, taking months to wind down operations and often selling holdings to Russian companies. McDonald’s sold its 850 restaurants to a Russian franchisee, who is moving to reopen them under the name Vkusno-i Tochka. British energy giants Shell and BP are charging billions of dollars in fees to exit investments and holdings in Russia.
Meanwhile, some Western companies have remained in Russia or are partially active. French-owned home improvement retailer Leroy Merlin has kept its 112 stores open in Russia, for example, while PepsiCo, Nestle and drugmaker Johnson & Johnson supply essentials such as medicines and infant formula while halting non-essential sales.
H&M said it expects the costs of leaving Russia to reach about 2 billion Swedish kronor ($197 million), which will be included as non-recurring costs in its third-quarter earnings this year.
IKEA said in June it will begin looking for new owners for its four factories in Russia and will close its purchasing and logistics offices in Moscow and Minsk, Belarus, a key Russian ally.
Russian President Vladimir Putin has pushed for years to develop and distribute Russian substitute goods and services to offset the loss of Western imports, which has become urgent as companies such as H&M and IKEA wind down operations.
It can be difficult to tell when stores in Russia are closed. At the famous GUM department store lined with shops on Red Square, most of the closed shop windows still have the lights on and a clerk or guard inside.
Source: sn.dk
