Representatives of luxury brands held the Russian market for some time, hoping for changes in the “geopolitical situation,” but in vain.
International luxury brands, which suspended operations in the Russian Federation after Russia’s major invasion of Ukraine, have now begun closing their stores en masse. This was reported by the Russian publication Kommersant.
In particular, the closure of three Moscow Prada boutiques became known from the company’s report. At the beginning of 2024, the brand has only six points left in Russia.
Italian Fendi refused to lease three premises in Moscow. The company also plans to terminate the contract for the lease of a boutique in TSUM from August 1.
The Russian representative office of French Chanel began to break lease agreements for premises for boutiques. At the beginning of the war, it had 17 boutiques in Russia, mainly in Moscow.
Last year, the Swatch Group (Breguet, Harry Winston, Omega and Rado) broke lease agreements for 15 of its stores in Moscow, St. Petersburg and other cities. The company has 13 points left in Russia.
All these brands suspended the supply of goods to the country after the embargo of the EU and US on the import of clothes, shoes and accessories to Russia worth more than 300 dollars and 300 euros per unit.
After the start of the invasion of Ukraine, 27% of luxury foreign retailers suspended the work of their stores in Russia, said IBC Real Estate. However, they continued to occupy space in major retail corridors and shopping centers. Most brands belong to large groups – LVMH (Christian Dior, Givenchy, Bvlgari), Kering (Alexander McQueen, Balenciaga) and Richemont (Cartier, Chloe, Piaget).
Luxury representatives remain in the Russian market for some time and hope for changes in the “geopolitical situation.” But investing money in idle stores is not profitable, the media notes.
New tenants can’t offer landlords the rates luxury brands can afford, so landlords aren’t interested in breaking ties.
However, there are brands that still fulfill their contractual obligations under rental contracts. These are Gucci, Van Cleef & Arpels, Hermes, Louis Vuitton and Dior.
The terms of their lease agreements will expire, the question of further activities in Russia is open.
Let’s remember that Western companies wrote off more than $107 billion after leaving the Russian market because of its aggression in Ukraine.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.