Uniqlo Owner Pledges to Stay in Russia as Wave of Companies Exit

Fast Retailing Co., Asia’s largest retailer and parent of Uniqlo, will continue to operate in Russia even as international pressure to isolate the country for its invasion of Ukraine sees waves of companies pull out.

“Clothing is a necessity of life. The people of Russia have the same right to live as we do,” chief executive Tadashi Yanai said, according to emailed remarks that were first published by Nikkei. While he’s against the war, and urged every country to oppose it, all 50 Uniqlo stores will continue to operate in Russia.

His remarks run counter to moves by some of the world’s biggest brands to exit or suspend operations in Russia, a dramatic reversal of three decades of investment by Western and other foreign businesses following the collapse of the Soviet Union in 1991.

Yanai has said he questions a trend that pressures companies to make political choices. In April last year, he declined to comment on issues around sourcing cotton from China’s Xinjiang region, a month before it was revealed the US had earlier blocked a shipment of Uniqlo shirts on concerns about forced labour. The company also faces a French probe alongside a number of fashion brands.

Nike Inc. and others have pledged not to use any cotton from Xinjiang at all, a step Fast Retailing has not taken yet, though the company insists there’s no forced labor in its supply chain.

Russia’s invasion of Ukraine has drawn international condemnation, sparked trade restrictions and financial penalties, and spurred an exodus of global companies. Fast Retailing’s bigger rival Inditex SA is temporarily closing its 502 stores in Russia and suspending online sales. Apple Inc. and Nike Inc. have also closed stores, while carmakers including BMW AG and General Motors Co. have suspended vehicle deliveries.

The Japanese government has followed the line of the US and much of Europe in imposing a raft of sanctions, including freezing the assets of a number of Russian officials and oligarchs, as well as those of financial institutions including Russia’s central bank.

So far, Japanese companies are split. The country’s biggest carmakers Toyota Motor Corp. and Honda Motor Co. said they’re halting vehicle shipments to Russia, while a business lobby warned trading giants Mitsubishi Corp and Mitsui & Co. not to rush into exiting from a Russian oil and gas project. Japan Tobacco Inc., which has a 37 percent stake of the Russian market, continues to operate in Russia and says it is “fully committed” to complying with national and international sanctions.

— Bloomberg; By Kanoko Matsuyama

Britain’s Next Closes Russia Operations

British clothing retailer Next is to close its Russian operations following Russia’s invasion of Ukraine, joining a growing list of companies shunning the country.

Next has told staff at its Russian distribution hub, which fulfills Russian online orders to Russian customers, that over the next few days, it will be winding down the operation in an orderly way and the website will be closed, a spokesperson for the company said.

Bulk replenishment stock transfers from the UK to the Russian hub stopped last week.

Russia represents a tiny percentage of Next’s overall sales.

— Reuters; By James Davey; Editing by Elizabeth Piper

Levi’s Suspends Commercial Operations in Russia

Levi Strauss & Co is temporarily suspending commercial operations in Russia, including any new investments, joining a slew of Western brands that have halted operations in the country following its invasion of Ukraine.

“In 2021, approximately 4 percent of the company’s total net revenues were derived from Eastern Europe, half of which was related to Russia,” Levi’s said in a statement.

— Reuters; By Praveen Paramasivam in Bengaluru; Editing by Saumyadeb Chakrabarty

Luxury Goods Add to French Stock Market Slide

France’s stock market fell on Monday, weighed down by a drop in the shares of French bank Société Générale and luxury goods companies LVMH and Kering, as global markets reeled in the wake of Russia’s invasion of Ukraine.

France’s benchmark CAC-40 equity index was down 3.3 percent.

SocGen, which owns Russia’s Rosbank, was down 9 percent.

The shares of LVMH, Kering and Hermès also slid after the companies said they would temporarily close stores in Russia.

— Reuters; By Sudip Kar-Gupta; Editing by Edmund

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