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French luxury group Hermès said on Friday it would temporarily close its stores in Russia and pause all commercial activities in the country, the first major international luxury group to publicly announce such a move.
“Deeply concerned by the situation in Europe at this time, it is with regret that we have taken the decision to temporarily close our stores in Russia and pause all our commercial activities from the evening of March 4th,” Hermès said in a post on its LinkedIn page. It gave no further details.
Hermès has three stores in Moscow.
Doing business in Russia has become complex following Russia’s invasion of Ukraine, which prompted the United States and Europe to impose sweeping sanctions.
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While affluent Russians are keen consumers of luxury goods, analysts say the proportion of luxury sales generated from Russian nationals is small compared to the industry’s main growth engines, China and the United States.
According to estimates from Jefferies, Russians account for around $9 billion in annual luxury sales, around 6 percent of Chinese spending and 14 percent of American spending.
L’Oreal, LVMH and Kering have all pledged financial support to organisations assisting Ukrainian refugees.
Swiss watchmaker Swatch Group, which owns high end watches and jewellery labels including Harry Winston, said it would continue its operations in Russia but was putting exports on hold “because of the overall difficult situation.”
By Mimosa Spencer and Silvia Aloisi; editing by Tassilo Hummel, Jon Boyle and Susan Fenton.
Learn more:
Fashion Week in the Fog of War: To Speak Up or Stay Silent?
The fashion industry should use both its soft power and economic heft to pressure Russia and support the people of Ukraine, writes Imran Amed.
