It can take time for a major retailer to disentangle itself from a market like Russia, but now two major ones are set to leave, RadarOnline.com has learned.
And it is causing Russians to rush to make last minute purchases.
At the beginning of March, IKEA and H&M announced that they were temporarily pausing operations as a result of Russia’s invasion of Ukraine. IKEA at the time had 17 stores in Russia, while H&M had 168.
In the intervening five months, it has been decided that the exit will be permanent. While IKEA is liquidating its remaining inventory online only, H&M is still selling what's left at brick and mortar stores.
Locations that reopened Aug. 2 and again Aug. 9, both Tuesdays, included a store at the Aviapark shopping mall in Moscow.
“I will start looking at Russian brands,” H&M shopper Anya told the Associated Press. Another customer, Leonid, said he was “very hurt” that H&M was closing down in Russia. “A good store is leaving,” he bemoaned.
Both IKEA and H&M are currently looking for Russian buyers for their assets. In IKEA's case, this includes four factories, while for H&M, besides the stores, there is a 60,000 square foot logistics facility.
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The cost of exiting Russia is already on the books for H&M in the upcoming third quarter, at an estimated total of $197 million U.S. The IKEA loss from the move have not yet been publicly shared.
Several other companies, such as McDonald’s have already left the country.
IKEA had the larger workforce in Russia and Belarus, 15,000, compared to 6,000 for H&M. Last month, IKEA announced that laid off Russian workers would be receiving six months of pay and benefits.
One source of goods that may gradually take the place of IKEA in Russia is inmates. “Prison colonies may well take the place of IKEA,” Ivan Sharkov, head of the Sverdlovsk region penitentiary service’s inmate labor adaptation program, told a local Russian newspaper. “If you compare furniture, we have better quality and lower prices.”