Luxury brands are closing stores in Russia due to sanctions

Luxury international brands that suspended operations in Russia after the outbreak of the war in Ukraine are beginning to get rid of their stores. It is simply not profitable for retailers to rent space for non-operating stores for a long time, writes “Kommersant”.

Following Chanel, the Swiss watch manufacturer Swatch Group has halved the number of its Russian outlets. The company has 13 stores left. Italian Prada and Fendi followed the same path. Prada announced the closure of three Moscow stores, including a boutique in GUM. At the beginning of 2024, the brand still has six sales points in Russia, according to the company’s report.

The Italian Fendi announced that it has refused to lease three premises in Moscow. In 2024, the brand will close all its stores in Russia.

At the end of 2023, the revenue of Fendi Ru LLC fell almost 22 times – from 800 million rubles to 36 million. In 2023, the company had no sales, while back in 2022, revenue from them amounted to 358 million rubles.

The French fashion house Hermès also finally left Moscow GUM. reports RBC. In 2023, Ermes Rus JSC reduced its revenue by 32 times – from one and a half billion to 47 million rubles, and its net loss amounted to almost two billion rubles.

The launch of Russia’s large-scale invasion of Ukraine and the imposition of sanctions against Moscow, including a ban on the export of luxury goods to Russia over three hundred euros, made it impossible for Hermès and other luxury brands to operate in the country. Companies had to stop supplies completely. However, some of them, in particular Hermès, intend to resume the activities of their Russian subsidiary as soon as the situation allows.