Japanese casual wear retailer Uniqlo has decided to sell most of its stores in Russia after suffering multimillion-dollar losses last year, Kommersant reported on Friday.
The company has not officially announced its withdrawal from the country, but market experts believe that the process has already been initiated.
Most of Uniqlo’s former outlets will reportedly be occupied by Russian clothing brand Gloria Jeans, the newspaper said.
Uniqlo halted operations at all of its 50 Russian stores last year and ceased online sales following the outbreak of hostilities in Ukraine. The company appeared reluctant to leave, and Uniqlo owner Tadashi Yanai defended the initial decision last March to keep Russian stores open, saying that clothing is a “necessity of life.”
“The people of Russia have the same right to live as we do,” he said at the time, before the decision was reversed.
Over the past year, the retailer has been offloading its online stock to compensate for losses of over 10 billion rubles ($130 million), generated by the necessity to pay rent for closed stores. According to data from Uniqlo Rus, the company earned 12 billion rubles ($156.2 million) last year.
READ MORE: Russia exit cost foreign retail brands billions – Kommersant
Japanese businesses initially took a wait-and-see approach on Russian operations, but increasing international pressure, reputational risks and supply chain disruptions have forced a large number of companies to withdraw.
Numerous Western brands have also faced major losses on exiting Russia. Last year, Swedish clothing brand H&M lost some $363 million. Spanish clothing conglomerate Inditex, the owner of brands such as Zara, Bershka, and Massimo Dutti, suffered about $300 million in losses. French sporting goods retailer Decathlon lost around $140 million, while luxury Italian retailer Moncler and French counterpart Hermes jointly lost around $200 million.
Source: Russia Today