Home Luxury brand Hermès becomes the first major luxury brand to close Russian stores

Hermès becomes the first major luxury brand to close Russian stores

0

French luxury house Hermès International SA has announced it is suspending operations in Russia, becoming the first major luxury brand to close its Russian stores amid the conflict in Ukraine.

Hermès, which is best known for its Birkin handbags, has three locations in Moscow, according to the company’s website, including one in Red Square. These stores will “temporarily close” from Friday evening local time, Hermès said in a statement, adding that it was “deeply concerned about the situation in Europe”. Hermès did not give a precise justification for its decision.

Russian consumers spend $9 billion a year on luxury goods and account for about 3% of total luxury revenue, according to Jefferies Group LLC, although half of that spending is made in stores outside of Russia. American consumers, by comparison, spend seven times more on luxury goods.

Hermès’ move follows similar moves by other retailers as the war in Ukraine escalates. Both Hennes & Mauritz AB and Ikea announced they were suspending sales in Russia earlier this week, while Apple Inc. said it was suspending sales in the country as it was “deeply concerned about the invasion Russian from Ukraine”.

This week, luxury companies such as LVMH Moët Hennessy Louis Vuitton, Kering SA and Chanel SA announced donations to charities supporting the humanitarian response in Ukraine, without approaching Russia directly.

Burberry Group PLC said on Thursday it would stop restocking its Russian stores due to “operational challenges”, although its three locations remain open for the time being.

Compagnie Financière Richemont SA, which owns luxury brands including Cartier, announced later Friday that it had also suspended operations in Russia in response to the crisis in Ukraine. Its brands operate a dozen Russian stores.