Exclusive Nike will leave Russia entirely

Exclusive Nike will leave Russia entirely

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

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PARIS/COPENHAGEN/LONDON, June 23 (Reuters) – Nike (NKE.N) is leaving Russia three months after suspending its operations there, the U.S. sportswear maker told Reuters on Thursday. as the pace of Western companies leaving Russia country accelerates.

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 still open were operated by independent partners.

On Thursday, it joined other major Western brands such as McDonald’s and Renault in confirming it will leave the country altogether.

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

Foreign companies seeking to exit Russia because of the war in Ukraine face the prospect of new laws being passed in the coming weeks, allowing Moscow to seize assets and impose criminal penalties. This encouraged some companies to accelerate their exit.

“What was a trickle is becoming a torrent (of Western companies leaving Russia),” said Paul Musgrave, a professor of political science at the University of Massachusetts.

Other sportswear makers are also pulling back.

Rival Adidas (ADSGn.DE) said in March that it was closing its Russian stores and pausing online sales. Puma (PUMG.DE) also suspended operations in March. Reebok suspended sales in March and is in talks to sell more than 100 stores to Turkish shoe retailer FLO Magazacilik. see More information

Adidas currently has no plans to resume business in Russia, the German sportswear company told Reuters on Thursday.

“Operation of Adidas stores and Adidas online retail in Russia remains suspended until further notice, this also applies to delivery of goods to Russia,” it said in an emailed statement.

Musgrave said companies leaving Russia may struggle to return.

“This presents opportunities for domestic companies in some markets, but even more so for brands from China and elsewhere to make inroads,” 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 bottom line.

The company has a history of taking a stand on social and political issues. He supported football quarterback Colin Kaepernick in his decision to kneel during the US national anthem as a protest against racism and fired Brazilian football star Neymar last year because he refused to cooperate in an investigation into allegations of sexual assault.

Russian media reported in May that Nike did not renew 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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Reporting by Mimosa Spencer, Jacob Gronholt-Pedersen and Richa Naidu. Additional reporting by Praveen Paramasivam; edited by Matt Scuffham, Jason Neely, Bernadette Baum and Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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