Sunday, September 25, 2022

H&M and IKEA auction their inventory to leave Russia

MOSCOW ( Associated Press) — Russians are taking advantage of Western clothing and furniture auctions this week, as H&M and IKEA are selling their final inventories in Russia as they leave the country in response to the war in Ukraine.

Sweden’s H&M and Holland’s IKEA curbed their sales in Russia after military operations began in late February and are now looking to unload their clothing and furniture stocks as they see the future as unpredictable. IKEA sales are only online, while the H&M store in Moscow’s Aviapark shopping mall saw a steady stream of young shoppers on Tuesday.

The racks and shelves in the clothing store were well stocked. Other nearby stores, including Zara, Osho, Bershka, Pull & Bear and Uniqlo, were closed, while The New Yorker, Finn Flair, Marks & Spencer and Mango were open.

“I’ll start looking for Russian brands,” said one H&M shopper, who only revealed her name to be Anya after leaving the store. Another shopkeeper, who only identified himself as Leonid, said he was “very hurt” by H&M’s closure: “A good store is going to.”

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Both companies are also laying off employees. H&M said on Tuesday that 6,000 employees would be affected.

IKEA said in June that many workers would lose their jobs and that they would be guaranteed basic benefits along with six months’ salary. It said this week that it has 15,000 workers in Russia and Belarus, but did not confirm how many would be laid off.

“We are deeply saddened by the impact this has had on our partners and are extremely grateful for their hard work and dedication,” H&M Group CEO Helena Helmerson said last month.

Several Western companies promised to leave Russia due to the invasion of Ukraine. McDonald’s sold 850 of its restaurants to a Russian franchise owner. British energy giants Shell and BP are exiting investments and holdings in Russia.

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Others are halted or partially functioning. PepsiCo, Nestle and & Johnson are supplying essential items like medicine and baby formula, but have curbed the sale of non-essentials.

H&M estimates that leaving Russia will cost about $197 million. IKEA said in June that it would begin looking for new owners for four of its factories in Russia and would close its procurement and logistics offices in Moscow and Minsk, Belarus, a major Russian affiliate.

It is difficult to know when the stores in Russia will be closed. In the huge GUM department store on Red Square, most of the closed stores still have lights on and an employee or guard is inside.

Nation World News Desk
Nation World News Desk
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