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Birkin bag maker Hermes and Cartier owner Richemont were the
first firms to announce such moves, followed by LVMH, Kering and
Chanel.
Doing business in Russia has become complex since Russia's
invasion of Ukraine, which prompted the United States, Britain
and the Europe Union to impose sweeping sanctions.
"Given our increasing concerns about the current situation, the
growing uncertainty and the complexity to operate, Chanel
decided to temporarily pause its business in Russia," the French
luxury fashion house said in a LinkedIn post.
Luxury giant LVMH, which owns such brands as Christian Dior,
Givenchy, Kenzo, TAG Heuer and Bulgari among others, will close
its 124 boutiques in Russia from Sunday but will continue to pay
the salaries for its 3,500 employees in the country, a
spokesperson told Reuters.
French multinational Kering, whose brands include brands as
Gucci, Saint Laurent, Bottega Veneta and Boucheron among others,
has two shops and 180 employees, which the company will continue
to support.
While affluent Russians are keen consumers of luxury goods,
analysts say the proportion of luxury sales generated from
Russian nationals is small compared to the industry's main
growth engines, China and the United States.
Richemont, which also owns Dunhill, Jaeger-LeCoultre, Montblanc,
Piaget, and Van Cleef & Arpels among other brands, has around a
dozen directly operated stores, mostly in Moscow. It said in a
statement it had suspended commercial activities in Russia on
March 3 after stopping Ukraine operations on Feb. 24, the day
Russia launched its invasion.
Hermes, which has three stores in Moscow, had planned to open an
outlet in St. Petersburg later this year.
Investment bank Jefferies estimates that Russians account for
around $9 billion in annual luxury sales, which is around 6% of
Chinese spending and 14% of U.S spending on luxury goods.
Swiss watchmaker Swatch Group, which owns high end watches and
jewellery labels including Harry Winston, said it would continue
its operations in Russia, but was putting exports on hold
"because of the overall difficult situation".
L'Oreal, LVMH and Kering have all pledged financial support to
help Ukrainian refugees and Richemont said on Friday it was
initiating a "significant donation" to Medecins Sans Frontieres.
(Reporting by Mimosa Spencer, Silvia Aloisi and Layli Foroudi;
Editing by Tassilo Hummel, Jon Boyle, Susan Fenton, Alexander
Smith and Sandra Maler)
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