- The French group Hermes has three stores in Moscow
- Hermes “deeply concerned about the situation in Europe”
- The Russians spend $ 9 billion a year on luxury goods – Jefferies
PARIS, March 4 – The world’s leading luxury brands said on Friday they planned to temporarily close stores and pause business operations in Russia.
Bag maker Birkin Hermes and Cartier owner Richemont were the first companies to announce such moves, followed by LVMH (LVMH.PA), Kering (PRTP.PA) and Chanel.
Doing business in Russia has become difficult since Russia’s invasion of Ukraine, prompting the United States, Britain and the European Union to impose broad sanctions.
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“Given our growing concerns about the current situation, growing uncertainty and the complexity of the work, Chanel has decided to temporarily suspend its business in Russia,” the French luxury fashion house said in a post on LinkedIn.
Luxury giant LVMH, which owns brands such as Christian Dior, Givenchy, Kenzo, TAG Heuer and Bulgari, among others, will close its 124 boutiques in Russia on Sunday, but will continue to pay the salaries of its 3,500 employees in the country, a spokesman said. Reuters.
The French multinational Kering, whose brands include brands such as Gucci, Saint Laurent, Bottega Veneta and Boucheron, has two stores and 180 employees that the company will continue to maintain.
While wealthy Russians are avid consumers of luxury goods, analysts say the share of luxury sales generated by Russian citizens is small compared to the main drivers of growth in industry, China and the United States.
Richemont, which also owns Dunhill, Jaeger-LeCoultre, Montblanc, Piaget and Van Cleef & Arpels, among other brands, has about a dozen directly operated stores, mostly in Moscow. A statement said it had suspended trade in Russia on March 3rd after halting operations in Ukraine on February 24th, the day Russia began its invasion.
Hermes, which has three stores in Moscow, planned to open a store in St. Petersburg later this year.
Jefferies Investment Bank estimates that the Russians account for about $ 9 billion in annual luxury goods sales, about 6 percent of China’s spending and 14 percent of U.S. luxury goods spending.
Swiss watchmaker Swatch Group (UHR.S), which owns high-end watches and jewelry labels, including Harry Winston, said it would continue to operate in Russia but halted exports “due to the overall difficult situation”.
L’Oreal (OREP.PA), LVMH (LVMH.PA) and Kering (PRTP.PA) pledged financial support to help Ukrainian refugees, and Richemont said on Friday he had initiated a “significant donation” to Doctors Without Borders “.
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Report by Mimosa Spencer, Sylvia Aloisi and Layla Forudi; Edited by Tassilo Hummel, Jon Boyle, Susan Fenton, Alexander Smith and Sandra Maler
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