Nike to leave Russia as pace of western firms leaving

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Nike to leave Russia as pace of western firms leaving

The US sportswear maker said on Thursday that Nike is making a full exit from Russia after suspending its operations there, as the pace of western companies leaving the country accelerates.

On March 3rd Nike said it would temporarily suspend operations at all 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, like McDonald's and Renault, in confirming that it will leave the country completely.

Nike has made the decision to leave the Russian marketplace, according to an emailed statement.

We want to make sure we are fully supporting our employees while we scale down our operations over the coming months. Foreign companies trying to leave Russia over the war in Ukraine face the prospect of new laws being passed in the coming weeks that allow Moscow to seize assets and impose criminal penalties.

That has encouraged businesses to accelerate their departure.

Paul Musgrave, a political science professor at the University of Massachusetts, said that a trickle is becoming a torrent of Western companies leaving Russia.

Other sportswear makers have been pulling back.

In March, Rival Adidas said it was shutting its Russian stores and suspending online sales.

Puma suspended its operations in March, while Reebok suspended sales in March and is in talks to sell more than 100 stores to Turkish shoe retailer FLO Magazacilik.

According to the German sportswear company, Adidas has no plans to resume business in Russia.

The operation of Adidas' stores and Adidas' online retail in Russia is suspended until further notice, this also applies to the delivery of goods to Russia, it said in an emailed statement.

Some companies that leave Russia may struggle to return, according to Musgrave.

This presents opportunities for domestic firms in some markets but also more for brands from China and elsewhere to make inroads, he said.

The move is symbolic rather than material to the results for Nike, which gets less than 1 per cent of its revenue from Ukraine and Russia combined.

The company has a history of taking a stand on social and political issues.

It endorsed American football quarterback Colin Kaepernick in his decision to kneel during the US national anthem as a protest against racism and dropped Brazilian football star Neymar last year because he refused to cooperate in an investigation into sexual assault allegations.

In May, Russian media reported that Nike had not renewed its agreements with its largest franchisee in Russia, Inventive Retail Group, which operates 37 Nike-branded stores in Russia through its subsidiary Up And Run.