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Russians Buy Last Goods From H&M, IKEA As Stores Wind Down

Russians Buy Last Goods From H&M, IKEA As Stores Wind Down

MOSCOW (AP) — Russians are buying Western fashion and furniture this week H&M Y IKEA sell the last of its inventory in Russia, moving forward with its departure from the country after it sent troops to Ukraine.

Sweden-based H&M and Netherlands-based IKEA halted sales in Russia after the military operation began and are now looking to shed their clothing and furniture stocks as they scale back operations there, saying they the future is unpredictable. IKEA sales are online only, while the H&M store in Moscow’s Aviapark shopping mall saw a steady stream of young shoppers on Tuesday.

Racks and shelves were well stocked in the clothing store. Nearby stores were closed, including Zara, Oysho, Bershka, Pull & Bear and Uniqlo, while the New Yorker, Finn Flare, Marks & Spencer and Mango were open.

“I will start looking for Russian brands,” said an H&M shopper, who gave only her first name Anya, after leaving the store. Another shopper, who only identified himself as Leonid, said he was “very hurt” by H&M’s closure: “A good store is leaving.”

Both companies are laying off staff as they scale back their business in Russia. H&M said on Tuesday that 6,000 workers will be affected and that it was working out the details to offer continued support in the coming months.

IKEA said in June that many workers will lose their jobs and guaranteed them six months’ pay as well as basic benefits. It said this week that it has 15,000 workers in Russia and Belarus, but did not immediately confirm how many would be laid off.

“We are deeply saddened by the impact this will have on our colleagues and very grateful for all their hard work and dedication,” H&M Group CEO Helena Helmersson said last month.

Many Western companies promised to leave Russia after it sent troops to Ukraine, taking months to wind down operations and often selling stakes to Russian companies. McDonald’s sold its 850 restaurants to a Russian franchise owner, who is moving to reopen them under the name of Vkusno-i Tochka. British energy giants Shell and BP are charging billions of dollars to get out of investments and stakes in Russia.

Meanwhile, some Western companies have stayed in Russia or are partially operating. French-owned home improvement retailer Leroy Merlin has kept its 112 stores open in Russia, for example, while PepsiCo, Nestlé and drugmaker Johnson & Johnson are supplying essential items like medicine and baby formula while halting non-essential sales.

H&M said it expects the costs of exiting Russia to reach 2 billion Swedish kronor ($197 million), which will be included as one-time costs in its third-quarter earnings this year.

IKEA said in June that it will start looking for new owners for its four factories in Russia and close its purchasing and logistics offices in Moscow and Minsk, Belarus, a key Russian ally.

Russian President Vladimir Putin has pushed for years to develop and deploy Russian substitute goods and services to make up for the loss of Western imports, which has taken on a new urgency as companies like H&M and IKEA shutter operations.

It can be hard to tell when stores are closed in Russia. In the famous GUM department store lined with shops on Red Square, most of the shuttered storefronts still have the lights on and a clerk or guard inside.

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