Japan’s Fast Retailing to suspend Russia operations in U-turn

TOKYO (Reuters) – Uniqlo owner Fast Retailing Co is suspending its Russian operations temporarily, it said on Thursday, reversing its previous position and adding that it condemned acts of aggression.

While numerous brands announced their exits from Russia over its invasion of Ukraine, Fast Retailing’s founder had told Japanese media that the company would continue operating its 50 stores in Russia because “clothing is a necessity of life”.

But on Thursday it said: “While continuing our Uniqlo business in Russia, it has become clear to us that we can no longer proceed due to a number of difficulties.

“We condemn all forms of aggression that violate human rights and threaten the peaceful existence of individuals.”

The company’s stance on Russia had stood in contrast to those of other global retailers, such as Nike Inc and Levi Strauss & Co, which had announced they would exit.

Fast Retailing and other foreign brands also faced a backlash last year over their operations in China amid criticisms of alleged human rights abuses in Xinjiang province.

Fast Retailing insisted its sourcing in China was sustainable, and founder Tadashi Yanai told the Nikkei newspaper the company wouldn’t choose between the U.S. and Chinese markets.

The company has more than 800 stores in China, about the same as in its home market of Japan. Staying in Russia put the company at risk of boycotts in its bigger consumer bases, said LightStream Research analyst Oshadhi Kumarasiri.

“We could expect such an approach when it comes to China as the Chinese market is extremely important to the company,” Kumarasiri, who publishes to the SmartKarma platform, told Reuters before the Russia pullout announcement. “However, Russia is not so important as to risk a backlash from other main markets.”

Fast Retailing will also halt online sales in Russia, the company said. The company previously announced it would donate $10 million and 200,000 clothing items to aid refugees from the crisis.

(Reporting by Rocky Swift and Tim Kelly; Editing by Jason Neely, David Goodman, Kirsten Donovan)