Russians buy latest goods from H&M, IKEA as stores close

MOSCOW — Russians are packing western fashion and furniture like H this week&M and IKEA are selling the last of their stock in Russia and are continuing to move out of the country after sending troops to Ukraine.

Sweden-based H&M and Netherlands-based IKEA had paused sales in Russia after the military operation began and now plan to unload their stocks of clothing and furniture while ending operations there, saying the future is unpredictable. IKEA’s sales are online only, while the HThe &M store in Moscow’s Aviapark shopping center saw a steady stream of young shoppers on Tuesday.

The racks and shelves were well stocked in the clothing store. Nearby shops were closed including Zara, Oysho, Bershka, Pull&Bear and Uniqlo, while New Yorker, Finn Flare, Marks & Spencer and Mango were open.

“I will go and look at Russian brands,” said a H&M shopper, who only gave her first name Anya, said after she came out of the store. Another shopper, who only mentioned his name as Leonid, said he was “very hurt” that H&M is going to close: “A good store is leaving.”

Both companies are firing staff because they are scaling down their activities in Russia. huh&M said Tuesday that 6,000 employees will be affected and it is working on details to provide continued support in the coming months.

IKEA said in June that many workers will lose their jobs and it has guaranteed them six months’ wages, as well as core benefits. It said this week it has 15,000 workers in Russia and Belarus, but did not immediately confirm how many would be laid off.

“We are deeply saddened by the impact this will have on our colleagues and are deeply grateful for all their hard work and dedication,” HHelena Helmersson, CEO of &M Group, said last month.

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Many Western companies promised to leave Russia after it sent troops to Ukraine. McDonald’s has sold its 850 restaurants to a Russian franchisee, who is relocating to reopen them under the name Vkusno-i Tochka. British energy giants Shell and BP are taking billions of dollars in costs to end investments and stakes in Russia.

Meanwhile, some western companies have remained or partially active in Russia. For example, French home improvement retailer Leroy Merlin has opened its 112 stores in Russia, while PepsiCo, Nestle and drug maker Johnson & Johnson supplies essential products such as medicines and baby food, while discontinuing non-essential sales.

huh&M said it expects the cost of leaving Russia to be about SEK 2 billion ($197 million), which will be included as a one-time expense in third-quarter earnings this year.

IKEA said in June it is looking for new owners for its four factories in Russia and will close its purchasing and logistics offices in Moscow and Minsk, Belarus, a key Russian ally.

Russian President Vladimir Putin has been pushing for years to develop and deploy Russian substitute goods and services to make up for the loss of Western imports, which has taken on a new urgency as companies like H&M and IKEA winding down their activities.

It is sometimes difficult to tell when shops in Russia are closed. At the famous GUM department store with shops in Red Square, most of the closed windows still have the lights on and a clerk or guard inside.

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