Luxury brands are closing their doors in Russia, what impact will this have on the fashion world?

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It is a true urban exodus that clothing brands are undertaking in Russia. From luxury to fast fashion, stores are closing their doors one by one in order to support the Ukrainian population and publicly express their disagreement with the violence that is ravaging the region and has already forced over 2 million people living in the country to flee.

This current conflict is shaking the Western world, and the economic sanctions will also have a significant impact on the lives of Russian citizens.

How is the fashion world reacting to this war at the borders of European space, and what will its impact be for these brands?

Which brands are closing their doors in Russia?

In order to symbolically distance themselves, to economically sanction Russia, and finally as a sign of protest against the war, luxury brands are pulling down their shutters. A few days after the fighting began, Chanel, Louis Vuitton, Gucci, Hermès, Prada, and Burberry along with Richemont, which owns Cartier, Chloé, and Montblanc, have decided to halt all their commercial activities in Russia. 

The brands also specify that these closures are temporary, hoping, of course, that the situation improves. They continue to pay the salaries of employees in Russia and Ukraine who are suffering from the conflict and affirm their concern for their teams during these difficult times “The safety of our employees is our priority, and we remain closely connected to our local teams whom we will continue to support” – Chanel.

In addition to closing stores, some brands are not hesitating to make donations to support the Ukrainian people during this ordeal.

The e-commerce market is also at a standstill.

It’s not just luxury brands that are leaving Russia. Fast fashion companies are also closing their doors.

H&M has halted all its operations in Russia, a country that represents a very significant market share. The Swedish group has also temporarily closed its stores in Ukraine, fearing for the safety of its employees. All Uniqlo, Mango, and Asos stores have also left the territory, leaving thousands of Russians unable to access their favorite brands.

What are the consequences for brands and the fashion market?

These closures isolate Russia for having invaded Ukraine. They also deprive brands of an important market share and economically.
One of the reasons for these hasty departures is financial. With the current sanctions imposed by the European Union, exports-imports to Russia are disrupted, as are money transactions. According to economist Estelle Brack, “With these sanctions, European companies exporting to Russia run the risk of not being paid, since money will not be able to leave Russia.”

If the economic consequences for businesses are significant, they are also for the residents. Since the beginning of this conflict, a new Russian story is being written. Companies are closing one after another in the country, depriving themselves of a significant percentage of sales, and above all, employees find themselves without work overnight. In the world of fashion, a whole dynamic is collapsing, and the recovery will be long and gradual.

Can the closure of major brands influence Russia to cease the war to avoid the country’s bankruptcy?

Yes…and no. Due to political protectionism, Putin had already considered the option of producing more in Russia and simultaneously distancing himself from foreign imports. Goods coming from European countries will become less accessible on the market, indeed, the Russian leader has decided to add European countries to the list of hostile nations to the Russian Federation.

However, the population is greatly affected by these closures and sees its way of life significantly disrupted. In a short time, Russians will have to learn to consume differently. What is terrible for those used to large stores can be an opportunity for others. Indeed, some citizens believe in regaining a certain sovereignty.

The final word

Brands have made an ethical choice not to conduct business in a country that initiates a war. This choice also ensures the image and the good reputation of the company. 

On social media, indeed, brands that had not ceased their operations in Russia were compelled to speak on this issue, and boycott hashtags emerged.

As Olivier Rousteing aptly stated while presenting his collection, “There are more important things happening in the world today.”
The world of fashion may seem superficial when a war breaks out; however, the store closures, the demonstrations of support for the Ukrainian people that took place during fashion week, as well as designers taking initiatives raising their voices for peace remind us that fashion has a significant influence in the world and will always support peace and beauty in the face of barbarism.