Russia’s invasion of Ukraine has instigated a humanitarian crisis and preoccupied world leaders with how to respond both short and long term. The violence has raised the specter of World War II, leading Europe, the United States, the United Nations and other countries to pull financial, military and diplomatic levers in hopes of forcing Russian President Vladimir Putin to stand down.
The situation has also raised logistical and moral questions for retailers and brands, many of which have enjoyed burgeoning sales to Russia. As the uncertainty ushered in by the pandemic ebbs, the war is introducing new unpredictability into the supply chain, the world economy and consumer sentiment.
Retail Dive will track the implications for retailers as the situation evolves.
Brands who have pulled out
In a rapidly evolving response, some companies have decided to stop selling their products or pull back on operations in Russia.
Nike’s website currently says that it cannot guarantee product delivery to Russia, and therefore online and app purchases are temporarily unavailable in the region. It advises shoppers to visit their nearest Nike store.
Apple suspended all product sales to the country, saying it is “deeply concerned” about the invasion and has paused transactions. In response, Ukraine’s Vice Prime Minister Mykhailo Fedorov on Tuesday urged Apple CEO Tim Cook to “finish the job” and block Apple Store access in Russia.
No more @Apple product sales in Russia!
Now @tim_cook let’s finish the job and block @AppStore access in Russia. They kill our children, now kill their access!
— Mykhailo Fedorov (@FedorovMykhailo) March 1, 2022
Additionally, TJX Companies announced that it is divesting ownership in Familia “in support of the people of Ukraine,” according to a filing with the Securities and Exchange Commission. Familia is a Russian-based off-price apparel and home decor retailer, which TJX acquired a 25% stake in for $225 million in 2019.
Other major retailer decisions, as of press time, include:
- H&M Group temporarily paused all sales in Russia. Stores in Ukraine have already been temporarily closed, according to a company statement. “H&M Group cares for all colleagues and joins all those around the world who are calling for peace,” the company said.
- U.K. based fashion retailers Asos and Boohoo suspended sales in Russia.
- Ikea is closing its stores in Russia, stopping production and halting all imports and exports to Russia and Belarus. The company noted that these decisions have an impact on 15,000 Ikea workers, so the company has “secured the employment and income stability for the immediate future” and will provide support to workers and their families in the region.
- Under Armour announced that it has stopped all shipments to its sales channels in Russia. “We are proud to stand with Ukraine against Russia’s attack on their democracy and will do what we can as a global company where standing for equality matters,” the company said in a statement.
- This week saw several luxury brands make donations in support of Ukraine and/or shut down sales in Russia, though a few high-end jewelry brands continue to operate there.
Brands doing something philanthropic
Several retailers in recent days have made financial commitments to benefit Ukrainians impacted by the crisis.
In a blog post published Monday, Etsy CEO Josh Silverman said the company is canceling the balance owed to Etsy by all sellers in Ukraine. The effort — which includes sellers on Etsy, Depop and Reverb — covers listing fees, transaction fees, advertising fees and other fees, and amounts to around $4 million, according to the blogpost.
“We’ve long been committed to creating economic opportunities as well as offering assistance in times of distress or injustice. Our efforts to support Etsy sellers in Ukraine are a reflection of that commitment,” Silverman said.
Jewelry brand Pandora earlier this week donated $1 million to UNICEF’s effort to help children impacted by the humanitarian crisis.
And Amazon on Tuesday announced it is working with NGOs and employees to support the people of Ukraine. The company said it is donating $5 million to organizations working to provide relief, including UNICEF, UNHCR, World Food Program, Red Cross, Polska Akcja Humanitarna and Save the Children. Amazon also will match employee contributions up to $5 million, and added a donation button on the homepages of its websites in the U.S., UK, Poland and Germany for its customers to use.
The e-commerce giant said it “gave employees in Poland additional time off to take care of themselves and their families, and we’re working with Ukrainian nationals to expedite immigration work visas if they’ve relocated.”
What retail executives are saying
Brian Cornell, CEO of Target:
“But I also have to acknowledge the continued uncertainty that surrounds our world, which has only been magnified by the growing conflict between Russia and the citizens of Ukraine. It serves as another reminder of our continued need to support our teams, our guests, our communities as we all navigate these very challenging times.
We know today’s consumers are facing a series of…hardships from the pandemic. We see higher prices across the country. We see supply chain constraints that are steadily working themselves out, but will likely take more time. Both of which are made more uncertain by the crisis in Ukraine.
For everyone who’s listening today, including our teams across the globe, know we are already working to determine the best way to support humanitarian efforts for the people of Ukraine. As we have throughout the last couple of years, we will rally our team, put our resources to work to support families through these challenging times.”
Michael Mathias, Chief Financial Officer of American Eagle Outfitters
“We’re also cognizant of the environment we’re operating in, including rising inflation, which [has] implications for our business and our customers lapping the strength from last spring as we cycle stimulus, continued disruption in the global supply chain environment and the war in Ukraine.”
Scott Lipesky, Chief Financial Officer of Abercrombie & Fitch
“[I]t’s a horrible situation with what’s happening in the Ukraine. We do not have a large exposure to that part of the world in Eastern Europe, and on the Western European side, we’re comping the reopening this year versus a pretty shutdown economy last year. So a lot of moving parts there and our hearts go out to what’s happening in that region.”
Scott Baxter, CEO of Kontoor Brands
“[W]e want to acknowledge the deeply saddening events that have unfolded in Ukraine over the last week and sincerely hope that you and your families around the globe are safe and healthy.”
