May 23, 2024

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Nike exclusive company to completely out of Russia

Nike exclusive company to completely out of Russia

PARIS / COPENHAGEN / LONDON, June 23 (Reuters) – Nike (NKE.N) The US sportswear maker told Reuters on Thursday it was in the process of fully exiting Russia after three months of suspending its operations there, with the pace of Western companies leaving the country accelerating.

Nike said on March 3 that it would temporarily suspend operations at all of its Nike-owned and operated stores in Russia in response to Moscow’s actions in Ukraine, adding that those that remain open are run by independent partners.

On Thursday, it joined major Western brands, such as McDonald’s and Renault, in confirming that they would leave the country entirely.

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“Nike has made the decision to leave the Russian market,” Nike said in an emailed statement. “Our priority is to make sure we fully support our employees as we scale back our operations responsibly over the coming months.”

Foreign companies seeking to exit Russia because of the war in Ukraine face the prospect of new laws in the coming weeks that would allow Moscow to seize assets and impose criminal penalties. This has encouraged some companies to speed up their exit.

“What used to be a tiny diameter is turning into a torrent (from the exit of Western companies from Russia),” said Paul Musgrave, a professor of political science at the University of Massachusetts.

Other sportswear makers are also holding back.

People walk past a closed store of sporting goods retail Nike at a shopping center in Saint Petersburg, Russia, May 25, 2022. REUTERS/Anton Vaganov

adidas competitor (ADSGn.DE) It said in March it was closing its Russian stores and temporarily halting online sales. puma (PUMG.DE) It also suspended its operations in March. Reebok suspended sales in March and is in talks to sell more than 100 stores to Turkish shoe retailer FLO Magazacilik. Read more

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The German sportswear company told Reuters on Thursday that Adidas currently has no plans to resume work in Russia.

“The suspension of the work of Adidas stores and online retail stores of Adidas in Russia continues until further notice, and this also applies to the delivery of goods to Russia,” the company said in an emailed statement.

Musgrave said companies leaving Russia may struggle to return.

“This provides opportunities for local companies in some markets but provides greater opportunities for brands from China and elsewhere to achieve successes,” he said.

For Nike, which gets less than 1% of its revenue from Ukraine and Russia combined, the move is largely symbolic rather than material to its results.

The company has a history of taking a stand on social and political issues. She backed midfielder Colin Kaepernick in his decision to kneel during the playing of the US national anthem in protest of racism and brought down Brazilian soccer star Neymar last year for refusing to cooperate in an investigation into allegations of sexual assault.

Russian media reported in May that Nike had not renewed agreements with its largest franchisee in Russia, Inventive Retail Group (IRG), which operates 37 Nike-branded stores in Russia through its subsidiary Up And Run.

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Additional reporting by Mimosa Spencer, Jacob Gronholt Pedersen and Richa Naidoo. Additional reporting by Praveen Paramasivam. Editing by Matt Skovham, Jason Neely, Bernadette Bohm and Jane Merriman

Our criteria: Thomson Reuters Trust Principles.

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