Luxury brands are closing stores in Russia due to sanctions

Luxury international brands, which suspended their activities in Russia after the war in Ukraine, are beginning to get rid of their stores. “Kommersant” writes that it is simply unprofitable for retailers to rent out spaces under non-working stores for a long time.

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 has six points of sale in Russia, according to the company’s report.

Italian Fendi reported that it refused to rent three premises in Moscow. In 2024, the brand will close all its stores in Russia.

According to the results 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 in 2022 the revenue from them amounted to 358 million rubles.

The French fashion house Hermès has finally left the Moscow GUM, reports RBC. In 2023, JSC “Hermes Rus” reduced its revenue 32 times — from one and a half billion rubles to 47 million rubles, and its net loss amounted to almost two billion rubles.

After the beginning of the large-scale Russian invasion of Ukraine and the introduction of sanctions against Moscow, including a ban on the export of luxury items to Russia worth more than three hundred euros, it became impossible for Hermès and other luxury brands to operate in the country. Companies had to completely stop deliveries. However, some of them, in particular Hermès, intend to resume the activities of their Russian subsidiary as soon as the situation allows.