How is the fashion industry responding to Russia’s invasion of Ukraine? Fashion industry halts operation in Russia

April 10, 2022 Staff

By Heekyeong Jo and B.Ellie Jin

Doing business globally requires swift adjustments to changes in host countries. Sudden events such as war can definitely affect the retail operation in the countries. Currently, Russia’s fashion industry is collapsing due to Russia’s invasion of Ukraine, which began on February 24, 2022. The invasion of Ukraine is incurring an exodus of global giant companies including Amazon, Apple, and Ikea. The fashion industry is the most actively participating in this movement. As the world continues to isolate Russia for its invasion of Ukraine, global fashion retailers have taken several actions- donation, suspension or scaling back of retail operations – to join the wave of this movement.

Donation

LVMH had donated $5.56 million to the International Committee of the Red Cross (ICRC) to help victims of this invasion.
Chanel made a $2.2 million donation to the relief organizations CARE and UN Refugee Agency (UNHCR).
Louis Vuitton donated $1.09 million to UNICEF to help Ukrainian children and families.
Mango also made a donation of $110,000 to the International Red Cross and Red Crescent Movement, as well as clothing donations for Ukrainian refugees.
The Armani Group donated about $543,000 to UNHCR for the assistance of victims of the Ukraine invasion.
Fast fashion retailer ASOS announced that it will make a donation to the Disasters Emergency Committee for Ukraine, as well as exploring methods of donating clothing to those affected by the conflict.
Burberry has also made a monetary donation to British Red Cross Ukraine Crisis Appeal and to charities that support humanitarian purposes in Ukraine.

Suspension

LVMH, Chanel, Hermes, Kering group, Burberry, Prada Group, H&M, Inditex, Asos, Nike and Adidas are temporarily suspending retail operations in Russia.

Scaling Back

Spanish fast fashion retailer Mango is shutting down its 55 retail stores in Russia, also halting online sales and stopping deliveries to Russia. Its 65 franchisees will remain open subject to product availability. German athletic fashion brand Puma also stopped all shipments to Russia, but stores remain open in the country.

While most fashion companies halted their retail operations and scaled back in Russia, some reversed their stand and others – Italian fashion group Zegna Group, Calzedonia, and France fashion brand Lacoste- continue sales in Russia. The founder of Uniqlo (Japanese apparel brand), Tadashi Yanai previously announced to keep opening operations in Russia, stating that clothing is a “necessity of life.” Upon strong criticism and boycotts from consumers, he apparently reversed his decision. He announced that due to “a number of difficulties” including operational difficulties and the worsening of the conflict situation in Ukraine, all Uniqlo stores in Russia closed March 10.

With over 600 companies from various sectors shutting down business in Russia, why is the fashion industry taking the lead in this movement? The brand image is of critical importance in the fashion industry and actions taken by fashion companies strongly affect their brand image. Pulling out of Russia can be expected to lose profits in Russia in part, but from a global perspective, this is only a part, and global consumers’ gaze and criticism of the fashion brand’s move are important points that cannot be ignored.

Reference

Kanoko, M. (2022, March 10). Uniqlo Fast-Fashion Chain Joins Russia Exodus in Reversal. Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2022-03-10/uniqlo-fashion-chain-joins-exodus-from-russia-in-reversal

Paris, M. (2022, March 4). Life After Ikea: A Running List of Retail Closures in Russia. Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2022-03-04/ikea-lvmh-h-m-a-running-list-of-retail-closures-in-russia

BOF team. (2022, March 3). Ukraine War: British Fashion Council Calls on Businesses to Take a Stance. Business of Fashion. Retrieved from https://www.businessoffashion.com/articles/global-markets/ukraine-war-british-fashion-council-calls-on-businesses-to-take-a-stance/

Jeffrey, S. & Yale Research Team (2022, April 6). Over 600 Companies Have Withdrawn from Russia—But Some Remain. Yale School of Management. Retrieved from https://som.yale.edu/story/2022/over-600-companies-have-withdrawn-russia-some-remain