UNIQLO backtracks on decision, suspends biz in Russia

UNIQLO backtracks on decision, suspends biz in Russia

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UNIQLO has reversed its decision to continue operating in Russia, announcing yesterday that it will temporarily suspend its operations in the country. UNIQLO's parent company, Fast Retailing, said it has become clear to the brand that it can no longer proceed its operations there "due to a number of difficulties". The fashion brand added that it is "strongly against any acts of hostility". "We condemn all forms of aggression that violate human rights and threaten the peaceful existence of individuals," said UNIQLO. 

UNIQLO initially announced on 8 March that it will continue to sell its clothes in Russia, with Fast Retailing's CEO Tadashi Yanai defending the brand's stance at that time. While other major corporations were quick to close their stores and halt operations in protest of Russia's unprovoked attack on Ukraine, Yanai argued at that time that "Russians still needed access to daily necessities such as clothing," according to multiple sources such as Nikkei AsiaChannel NewsAsia and BloombergMARKETING-INTERACTIVE has reached out to UNIQLO for a statement. 

"Our company mission is centred around offering the general public basic, affordable clothes that are made for everyone. We believe it is our responsibility to provide such essential items to all, including those affected by conflict, natural disasters and other devastations," the company said in its latest statement.

Last week, it donated US$10 million and clothing through its global partnership with UNHCR. Its employees in Europe have also been delivering clothing to affected people fleeing from Ukraine. "Our thoughts are with the people who are suffering today, and we will do whatever we can to support them during these very tragic times. We wish for the return of peace and stability as quickly as possible," UNIQLO added.

Aside from UNIQLO, another brand that recently came under scrutiny was McDonald's. Although the brand said earlier this week that it has shut down its operations in Russia, it previously kept mum about its plans nor commented on the situation in Russia.

According to Bloomberg, most of its Russian locations are owned and operated by McDonald's directly, as opposed to franchisees. This makes its Russian operations "particularly lucrative", accounting for approximately 9% of the company's global revenue even though only 2% of McDonald's restaurants are in Russia or Ukraine. McDonald's recent move is expected to cost the fast-food restaurant US$50 million a month, or about five to six cents per share.

Despite the temporary closure, McDonald's CEO Chris Kempczinski said in a statement that it will continue to provide salaries for all affected employees. Additionally, McDonald's donated US$5 million to its Employee Assistance Fund to provide financial support to its employees in Ukraine. Initially, McDonald's came under fire when it "stayed silent during the war" and did not make a stand despite its "relatively large Russian footprint", said in a separate article from CNBC

Since the invasion, numerous companies have pulled out of the market. At the same time, other retail and luxury brands including Levi's, Inditex, Herm├Ęs, Chanel, Cartier, LVMH, and Kering have temporarily suspended operations in Russia. LMVH's Louis Vuitton has pledged to donate US$1.08 million to refugees, adding that it was "deeply touched by the tragic situation unfolding in Ukraine". Chanel also cited "increasing concerns" regarding the current situation as well as the "growing uncertainty and the complexity to operate", the Financial Times reported. 

Related articles:
UNIQLO continues firmly in Russia despite slew of brand exits
McDonald's faces potential US$50m loss per month from Russia store closure
Russia-Ukraine conflict: A running list of brands taking action
Balenciaga sends smashed iPhones to invitees of fashion show

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