Zara, Paypal, Samsung suspend business in Russia
Zara, Paypal, and Samsung have suspended operations in Russia over the Ukraine invasion joining a long list of western companies who try to put pressure on Russia to stop the war.
The clothes retailer’s owner, Inditex, will shut all 502 stores of its eight brands, including Bershka, Stradivarius, and Oysho, from Sunday.
Payment giant Paypal said that “violent military aggression in Ukraine” is the reason to shut down its services, and over “geopolitical developments,” Samsung – Russia’s top supplier of smartphones – is suspending shipments.
Other global brands, including Apple, H&M, and Ikea, have stopped selling in Russia. The clothes store closures are expected to hit more than 9,000 of Inditex’s employees who work in Russia.
The Zara owner company said” “In the current circumstances Inditex cannot guarantee the continuity of the operations and commercial conditions in the Russian Federation and temporarily suspends its activity,”
Adam Cochrane, an analyst at Deutsche Bank Research, said that “logistical difficulties and the weakness in the rouble – resulting in large price increases for the Russian consumer – would make “operations difficult for all retailers importing into Russia.”
Online payments company Paypal has also shut down services in Russia but said it would support withdrawals “for a while.” to ensure that account balances were dispersed “according to applicable laws and regulations.”
The Ukrainian government called on Paypal to quit Russia and help its officials fundraising. While H&M cited “tragic developments” in Ukraine, other brands like Nike have said they can’t currently guarantee delivery of goods to customers in Russia.
Russia was the fifth largest European retail market in 2021, valued at £337.2bn. Some brands may not want to burn their bridges if there’s a chance of returning later; that is why many firms, including luxury retailers like Burberry and Chanel, say they are “suspending” sales and temporarily shutting stores rather than withdrawing altogether, says Chris Weafer, chief executive of consulting firm Macro-advisory Limited.
The other brands that have suspended their business in Russia are Apple, Ikea, H&M, Boohoo, Rolls Royce, Jaguar Land Rover(JLR), General Motors, Aston Martin, Netflix.