Luxury goods group Hermès temporarily closes stores in Russia

The Hermes logo is seen at a store in Paris, France, April 24, 2020. REUTERS/Charles Platiau

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  • The French group has three stores in Moscow
  • Hermès “deeply concerned about the situation in Europe”

PARIS, March 4 (Reuters) – French luxury group Hermes said on Friday it would temporarily close its stores in Russia and suspend all business activities in the country, the first major international luxury group to publicly announce such a decision.

“Deeply concerned about the situation in Europe at the moment, it is with regret that we have taken the decision to temporarily close our stores in Russia and suspend all our commercial activities from the evening of March 4,” Hermès said in a statement. a post on his LinkedIn Page. He gave no further details.

Hermes has three stores in Moscow.

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Doing business in Russia has become complex following Russia’s invasion of Ukraine, which prompted the United States and Europe to impose sweeping sanctions.

While affluent Russians are big consumers of luxury goods, analysts say the proportion of luxury sales generated by Russian nationals is low compared to the industry’s main growth drivers, China and the United States. .

According to Jefferies’ estimates, Russians account for about $9 billion in annual luxury goods sales, about 6% of Chinese spending and 14% of American spending.

L’Oréal (OREP.PA), LVMH (LVMH.PA) and Kering (PRTP.PA) have all pledged to financially support organizations helping Ukrainian refugees.

Swiss watchmaker Swatch Group (UHR.S), which owns high-end watch and jewelry brands including Harry Winston, said it would continue operations in Russia but was suspending exports “due to the situation overall difficult.

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Reporting by Mimosa Spencer and Silvia Aloisi; edited by Tassilo Hummel, Jon Boyle and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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