Western brands have been quick to shut down operations in Russia and wipe well-known goods off the shelves since the invasion of Ukraine. But how does it feel for those trying to run businesses in the country?
The Russian partner of a western brand tells their story.
“To say I’m worried about the future is a huge understatement. Waking up each day knowing that you are an involuntary part of this nightmare is devastating.
“I’ve built my business for decades, and now I’m watching it fall apart. I have people who depend on me – not just my family but my co-workers who are going to lose their source of income, their health insurance, their livelihood. One of my greatest concerns is their welfare. But of course, compared to the tragedy unfolding in Ukraine, all business concerns seem insignificant.
“Right now the retail stores are still functioning – but the biggest question we all have is what will happen in a few weeks or months when stocks run out.
“The big brands that operate in Russia themselves, like Ikea and Inditex [the owner of fashion chain Zara]have a bit more freedom – they can afford to temporarily suspend operations while continuing to pay their employees.
“The companies that operate under a licensing agreement face much greater challenges. I fear we are all going to have to make a difficult strategic decision – whether to close our stores permanently and sell our leftover stocks or try to keep the business going in the hope that the situation improves and deliveries can resume.
“The first scenario assumes we sell the shares quickly to salvage some of our investments and maybe try to use it to start a new company. The second scenario is more hopeful, but it would still involve closing some [sites] and laid off employees.
“Of course, the greatest risk of all is that this second scenario will require the return of our western partners. If this does not happen, we risk losing everything and having nothing.
“As of this writing, I’m working with the second scenario and hoping things will return to normal. But I also know a lot of people who have already closed their shops.
“The only thing that could be seen as an advantage is that our sales have gone up because people are realizing that stocks are going to run out. But it inevitably speeds up the timeline for my chosen scenario, meaning our supplies may run out before normal trade relations resume.
“Obviously there are many issues that companies with Western partners are currently facing – such as logistics and payments [in the light of sanctions on banks and payment of Russian companies]. But the decision to shut down operations in Russia was as political as it was operational for many brands. Personally, I am in constant contact with my partners in Europe and they have been very supportive.
“We are still able to pay staff in Russia, but at some point soon we will have to close select stores as stocks run out and pay severance to affected staff.
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“I know some people who have been forced to close their shops, sell their leftover stocks and have either already left Russia or are planning to leave soon.
“Naturally [our customers and staff] feel partially let down as many brands go out of business, tens of thousands of people are at risk of losing their jobs, source of income and access to healthcare.
“They just don’t know what’s going to happen, whether they’ll be able to pay their rent, pay off their credit card debt and provide for their families. I don’t think people are scared that the products they’re used to will no longer be available, I think they’re scared of not having a choice.”