Russia, adyu! French clothing retailer Kiabi leaves Russia.
And such a decision was made by the management of a number of foreign companies this year. Does this process have a common cause, or is the story individual?
The French chain of inexpensive family-owned clothing stores Kiabi will leave the Russian market by July 2022, writes RBK… The company “could not find its unique business model,” a representative of the Russian brand told the publication. Among other things, he planned to improve sales in Auchan stores or to work on a franchise. “But by the end of the year, the head office decided that it was necessary to curtail work in Russia,” a source close to the retailer stated to RBC.
At the moment, Kiabi has 17 stores in Russia, although a year ago there were 22 points. In addition to the capital, it is represented in St. Petersburg, Krasnodar, Ufa, Kazan, Samara and Voronezh.
Kiaby is owned by the French corporation Mulier, which includes Auchan, Decathlon and Leroy Merlin. The network has been operating on the Russian market for 13 years.
Against the backdrop of a pandemic that hit trade in general hard, Kiabi only sluggishly copied the behavior of more creative competitors, says Maxim Tishchenko, executive director of VSK Group.
Maxim Tishchenko Executive Director VSK Group
It is possible that other players in the industry may follow Kiabi. Due to the rise in the cost of logistics, raw materials, lockdowns in production, the entire fashion retail is waiting for a difficult year. It will become difficult for other products as well.
Several other large foreign brands announced their withdrawal from the Russian market this year. It is a German online retailer, mytoys.ru, that sells products for children. In the pandemic 2020, he received billions of dollars in losses. Fruttis and Nezhny yoghurts disappeared from the shelves – their producer Campina closed its business in Russia. Even from the domestic retail banking market, she decided to leave one of the world’s financial corporations – Citigroup. Honda also left Russia – in terms of car sales. The last CR-V will be sold next summer. In addition, the German supermarket chain Billa left the country this year.
The decisions to leave these different brands are based on common reasons, believes Alexei Petropolsky, an entrepreneur, head of the Urvista law firm, a member of the small business organization “Opora Rossii”.
Alexey Petropolsky entrepreneur, head of the Urvista law firm, member of the Opora Rossii small and medium-sized business organization
However, it should still be noted that there is no mass exodus of brands from Russia. And, according to the experts interviewed by Business FM, whether it is foreseen.