Discreet since the start of the war in Ukraine, the luxury and fashion sector is gradually distancing itself from Russia, limiting its presence in the country and financially supporting aid for Ukrainian refugees. At the initiative of this withdrawal, Hermès was the first in France to announce, on Friday, the “temporary” closure of its three stores in Russia. The other major French luxury groups, Chanel, LVMH and Kering have followed suit.
“Given the current circumstances in the region, LVMH regrets to announce the temporary closure of its stores in Russia as of March 6“, told AFP a spokesperson for LVMH on Friday evening. Before these French groups, the British Burberry had already suspended its deliveries to Russia, due to “operational difficulties”.
If Russia may appear to be a land of choice for luxury, it would actually represent only a small part of their turnover: barely 1% according to Kering or Burberry, 2% according to LVMH. With a relatively modest number of stores: certainly LVMH, which has 75 brands, has 124 of its own stores in Russia, but for Chanel or for Kering (a dozen brands), the presence is much smaller, respectively 17 stores and a few points of sales for the first, two shops and four points of sale for the second.
However, Russians also make their purchases elsewhere than in Russia, in shops in Paris, on the Côte d’Azur and in many other countries and regions of the world. Unlike other sectors, luxury has not suffered from the health crisis linked to Covid-19, with some groups even posting record net profits compared to 2019. That of LVMH thus rose from 7.8 billion euros. euros to 12 billion in two years. “Our sales are much higher than they were in 2019, we have experienced double-digit growth in recent years,” said Pietro Beccari, CEO of Dior, on Saturday, interviewed on France Inter.
Growth largely driven by the public of emerging countries, China in the lead, but also Brazil and Russia, which can make the major groups in the sector hesitate to make decisions that would alienate part of their wealthy clientele. In the fashion industry, others have also chosen to suspend their activity in Russia, such as the Swedish H&M on Wednesday, followed on Saturday by its Spanish competitor Inditex, parent company of Zara and world leader in clothing; which has 502 stores in Russia.
Conversely, French groups from other sectors, such as Danone or Renault, maintain their activities in Russia. TotalEnergies has certainly announced that it is not considering new investments there, but does not plan to withdraw. The same is true of Société Générale, which is very exposed via its subsidiary Rosbank.
If the luxury groups are discreet vis-à-vis the subject of Ukraine, some of their brands do not hesitate to show support for Ukrainians, partly on social networks, like Balenciaga (group Kering), who posts a Ukrainian flag as the one and only photo on his Instagram account. The brand goes further since it opens its social networks “to relay informationaround the situation in Ukraine.
One of the reasons for this involvement is to be found in the personal history of its artistic director, Demna Gvasalia, a Georgian who had to flee his country at the age of 12 because of the war and who denounced the “Russian aggression once morest Ukraine“. That of Balmain, Olivier Rousteing, said on Instagram “inspired by dignity, resilience and devotion to freedomUkrainians. Both announced donations to the World Food Program (WFP) and the UN High Commissioner for Refugees (UNHCR) to help Ukrainians fleeing the fighting.
In this period of Fashion week, other initiatives have gone in this direction, such as the model Mica Argañaraz who intends to donate part of her income from this period to Ukrainian associations, an initiative taken up by other models, including Bella Hadid and Francesca Summers.
In terms of donations, groups are also present: LVMH said to pay five million euros for the International Committee of the Red Cross (ICRC), Chanel two million for the NGO Care and the UNHCR, Louis Vuitton one million for the ‘Unicef… Others like OTB (Prada, Diesel), Burberry, Valentino or Kering have also announced donations, but without specifying the amounts.
On the other hand, the Federation of Haute Couture and Fashion has still not decided whether or not to maintain the virtual parade of Russian designer Valentin Ioudachkine, who notably redesigned the uniforms of the Russian army.
