Three months after suspending its operations in Russia, NIKE, Inc is preparing to make a full exit – a move one analyst says the company is set to gain from, as it is one of the first apparel players to fully withdraw.
In a statement shared with Just Style, a Nike spokesperson says: “Nike, Inc has made the decision to leave the Russian marketplace. Our priority is to ensure we are fully supporting our employees while we responsibly scale down our operations over the coming months.”
The move comes after Nike said last month its franchise agreements with Up and Run will not be renewed in Russia, nor will any new investments take place.
During the company’s third-quarter earnings call, CFO Matthew Friend said Nike remains focused on the “safety and wellbeing of our teammates regarding the deeply troubling crisis unfolding in Ukraine.”
He added: “Our owned stores and digital commerce operations remain paused in Russia and Ukraine. As a note, our business in both countries represents less than 1% of total company revenue.”
Emily Salter, senior analyst at GlobalDates, notes Nike is already incurring sales losses by halting operations in Russia, and three months down the line will be able to see the impact of this on its toplines.
“Brands will now be realising how potentially drawn out the conflict could be, so they do not have much more to lose, but can gain reputational benefits among consumers by completely withdrawing from Russia. Nike will especially gain from this, as it is one of the first apparel players to do so, but other brands are now likely to follow suit.”
Click here for Just Style’s coverage of the Ukraine-Russia crisis and its impact on the global apparel industry.