By Joshua Kirby
Luxury-goods companies LVMH Moet Hennessy Louis Vuitton SE, Kering, Chanel, Compagnie Financiere Richemont SA and Prada SpA are all temporarily closing stores in Russia amid the continuing invasion of Ukraine and resultant Western sanctions.
LVMH will temporarily close its 124 stores in Russia from Sunday, the sector-leading group told Reuters on Friday.
Meanwhile, Gucci owner Kering, Parisian fashion-house Chanel, and Swiss group Richemont all said on their LinkedIn pages Friday that they had suspended, or were going to suspend, operations in Russia.
French luxury company Hermes International SCA had posted a similar message on its LinkedIn page earlier the same day. Italy's Prada said Sunday that it would suspend retail operations in Russia.
Kering said it was temporarily closing its stores in Russia for those houses that the group operates directly in the country. Kering's principal brand Gucci operates 13 stores in Russia, according to its website, including nine in the capital Moscow.
Chanel said it would do the same, and that it had already suspended its e-commerce operations there, pointing to concerns and uncertainty over the situation and the complexity of operations.
Cartier owner Richemont said it had stopped its operations in Ukraine on Feb. 24 and in Russia on March 3.
"We will continue to monitor developments and adapt our measures accordingly," Richemont said. Hermes said it was deeply concerned by the situation in Europe, and would temporarily close its Russia stores from Friday evening, pausing all commercial activity in the country. Hermes operates three stores in Russia, all in Moscow, according to its website. All five companies said via LinkedIn that they would continue to support their local teams in Russia.
The decision to step back from Russia comes after Bloomberg reported last week that wealthy Russians were investing in luxury jewelry and watches in order to preserve the value of their savings as Western sanctions crush the ruble and keep the stock market closed. The chief executive of LVMH jeweler Bulgari told the news outlet that the sanctions seemed to have boosted the brand's business in Russia in the short term, though he noted that restrictions on Russian access to international financial tools could make it difficult to export to the country.
None of the companies set out the expected financial impact of halting their Russia operations. However, analysts have estimated that the luxury sector a whole makes less than 5% of its total revenue in Russia, and that the bigger risk comes from a more general economic downturn and resultant drag on consumer sentiment.
Write to Joshua Kirby at firstname.lastname@example.org; @joshualeokirby
(END) Dow Jones Newswires
March 07, 2022 02:50 ET (07:50 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.