A.S. Watson Group will be exiting the Russian market due to unsatisfactory business performance. The company did not relate its departure to the ongoing Russia-Ukraine war. In a statement, a spokesperson from A.S. Watson Group said, “After serious consideration, we decided to cease the operation of Watsons Russia by June 2022 and prioritize our investment in other markets.”
The company added that it made the decision in late January due to the unsatisfactory business performance in the Russian market.
Currently, Watsons Russia only has a presence in the city of Saint Petersburg with 47 stores. The company said although the local team had made many attempts to improve the business performance over the years, however, the results were not satisfactory.
After leaving Russia, Watsons will still operate in other European countries, including Ukraine and Turkey. The spokesperson said the decision of quitting the Russian market will allow the brand to focus more on other key markets where it can generate a better return on investment.
Many brands, including retail companies, from around the world are leaving the Russian market due to the ongoing Russia-Ukraine war. UNIQLO’s parent company, Fast Retailing, said it had become clear to the brand that it can no longer proceed its operations in Russia “due to a number of difficulties”. The fashion brand added that it is “strongly against any acts of hostility”. “We condemn all forms of aggression that violate human rights and threaten the peaceful existence of individuals,” said UNIQLO.
UNIQLO initially announced on 8 March that it will continue to sell its clothes in Russia, with Fast Retailing’s CEO Tadashi Yanai defending the brand’s stance at that time. While other major corporations were quick to close their stores and halt operations in protest of Russia’s unprovoked attack on Ukraine, Yanai argued at that time that “Russians still needed access to daily necessities such as clothing.”
Since the invasion, numerous companies have pulled out of the market. At the same time, other retail and luxury brands including Levi’s, Inditex, Hermès, Chanel, Cartier, LVMH, and Kering have temporarily suspended operations in Russia. LMVH’s Louis Vuitton has pledged to donate US$1.08 million to refugees, adding that it was “deeply touched by the tragic situation unfolding in Ukraine”. Chanel also cited “increasing concerns” regarding the current situation as well as the “growing uncertainty and the complexity to operate”.
McDonald’s has also shut down its operations in Russia. However, the move is expected to cost the fast-food restaurant US$50 million a month, or about five to six cents per share, CFO Kevin Ozan said at the UBS Global Consumer and Retail Conference. McDonald’s has also closed 108 of its stores in Ukraine for the time being. Together, these stores account for about 2% of its sales, 9% of its revenue, and 3% of its operating income, CNBC reported. However, McDonald’s CEO Chris Kempczinski said in a statement that it will continue to provide salaries for all affected employees. Additionally, McDonald’s donated US$5 million to its Employee Assistance Fund to provide financial support to its employees in Ukraine.
