Japanese casual wear retailer Uniqlo has made the decision to withdraw from the Russian market and has sold all of its stores in the country, according to a report this week by the Vedomosti newspaper. This information has been confirmed by the owners of Russian shopping malls where Uniqlo outlets were previously located.
A source quoted by Vedomosti stated, “Uniqlo has refused to lease premises for all its stores in Russia.” Most of Uniqlo’s former stores have now been occupied by Russian clothing brands such as Lime and Gloria Jean’s, the report added.
Uniqlo had decided to halt operations at all 50 of its Russian stores last year and it also stopped online sales following the outbreak of hostilities in Ukraine. However, the company had initially opted to keep its Russian stores open, with Uniqlo owner Tadashi Yanai defending the decision, stating that clothing is a “necessity of life.” He had emphasized that the people of Russia have the same right to live as anyone else. However, the company eventually reversed its decision.
In the past year, Uniqlo has been selling off its online stock in order to compensate for losses of over 10 billion rubles ($106 million) incurred from paying rent for closed stores. Uniqlo Rus data shows that the company earned 12 billion rubles ($127 million) last year.
Although Uniqlo has ceased all activities in Russia, it does not plan to liquidate its legal entity and hopes to resume business in the country someday, as stated by an unnamed partner interviewed by Vedomosti. However, it may prove difficult for the company to do so as its premises have already been transferred to other firms. Additionally, Uniqlo has lost the trust of shopping mall owners, making it challenging to secure preferential lease terms, the source explained.
Despite withdrawing from the market, Uniqlo products are still being sold on some Russian marketplaces, most likely through the current parallel import program, experts interviewed by Vedomosti have clarified.
Uniqlo’s exit from Russia highlights the challenges faced by international retailers in the country. Western sanctions, combined with economic difficulties in recent years, have made it a challenging business environment. However, the withdrawal of a major brand like Uniqlo could also be seen as an opportunity for Russian clothing brands to fill the gap in the market.
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