Of the world top luxury brands said on Friday that it plans to temporarily close stores and halt business in Russia.
Birkin bag maker Hermes and Cartier owner Richemont were the first to announce such moves, followed by LVMH (LVMH.PA), Kering (PRTP.PA) and Chanel.
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Doing business in Russia has become complicated since Russia Invades Ukraineprompting the United States, Great Britain and the European Union to impose sweeping sanctions.
“Given our growing concerns about the current situation, growing uncertainty, and operational complexity, Chanel decided to suspend its business in Russia”, the Frenchman haute couture house say in one LinkedIn Parcel.
Luxury giant LVMH, owns brands like Christian DiorGivenchy, Kenzo, TAG Heuer and Bulgari, among others, will close 124 stores in Russia from Sunday but will continue to pay their 3,500 employees in the country, a spokesman told Reuters.
French multinational Kering, whose trademarks include brands such as GucciSaint Laurent, Bottega Veneta and Boucheron among others, have two stores and 180 employees, which the company will continue to support.
While being rich Russian As luxury consumers, analysts say the percentage of luxury sales generated by Russian citizens is small compared with the industry’s main growth drivers, China and the United States. Ky.
Richemont, which also owns Dunhill, Jaeger-LeCoultre, Montblanc, Piaget and Van Cleef & Arpels among other brands, has about a dozen directly operated stores, mainly in Moscow. It said in a statement it had suspended commercial activities in Russia on March 3 after the cessation Ukraine active on 24 February, the day Russia launched the invasion.
Hermes, there are three stores in Moscowplans to open a store in St.Petersburg later this year.
Investment bank Jefferies estimates that Russians account for about $9 billion in annual luxury sales, about 6% of Chinese spending and 14% of US spending on luxury goods.
Swiss watchmaker Swatch Group (UHR.S), which owns high-end watch and jewelry brands including Harry Winston, said it will continue to operate in Russia, but is suspending exports. because of the difficult general situation”.
L’Oreal (OREP.PA), LVMH (LVMH.PA) and Kering (PRTP.PA) have all pledged financial support to help Ukrainian refugees, and Richemont said Friday that they are starting “substantial donation” to Medecins Sans Frontieres.
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