An industry association warned on Friday that Russia is looking to China, India, Iran, and Turkey to fill the void left by the exit of western retail corporations, as Moscow struggles to find methods to counteract its growing isolation in the face of sanctions.
The Russian Council of Shopping Centres (RCSC), an organisation that represents developers, shopping centre owners, and retail chain operators, said it was in talks with its counterparts in the four countries about finding alternatives to western brands.
“A list of foreign companies that have temporarily ceased operations in Russia was sent to them so that appropriate equivalents can be found,” a statement on the RCSC website read.
“Over time this will help supplement or completely replace goods of the defunct brands with ones of a similar quality and design.”
Since Russia launched tens of thousands of troops into Ukraine in what it terms a “special operation” on Feb. 24, dozens of major businesses have temporarily halted operations or departed the country.
Sanctions have impeded supply chains and fueled panic buying among some Russians, with reports of medical and sugar shortages, and rapid inflation is expected to drive up costs.
The issues confronting Russian retailers were reviewed at an RCSC meeting attended by over 100 market participants.
According to RCSC, Igor Maltinsky, director of development at Melon Fashion Group, the primary difficulty facing local retail enterprises is the uncontrollable expansion of production costs, which is attributable to enormous increases in procurement and logistics expenses, among other factors.
Melon has four fashion brands, primarily for women, Zarina, Befree, Love Republic, and Sela, and had 846 stores across Russia and the CIS at the end of 2021. It intended to undertake an initial public offering (IPO) this year. more info
Eastnine, a minority shareholder in Melon, announced on Thursday that the scheduled IPO had been postponed. It said that Western sanctions had harmed the company, making valuation extremely difficult.
(Adapted from Indiatimes.com)