(MENAFN) Japanese clothing brand, Uniqlo, is reportedly selling off most of its stores in Russia after incurring significant losses last year, according to reports by Kommersant. Although the company has not yet made an official announcement regarding the move, market experts suggest that the process of withdrawal from Russia may have already begun.
Uniqlo had to cease online sales and halt operations at all 50 of its Russian stores last year following hostilities in Ukraine. Despite initial reluctance to leave, Uniqlo's owner, Tadashi Yanai, eventually acknowledged the financial burden of keeping the stores open and decided to sell off most of its outlets. The majority of Uniqlo's former stores are expected to be taken over by Russian clothing brand, Gloria Jeans.
To compensate for losses of over 10 billion rubles (USD130 million), incurred due to the need to pay rent for closed stores, Uniqlo has been offloading its online stock over the past year. According to data from Uniqlo Rus, the company earned 12 billion rubles (USD156.2 million) in the previous year. The decision to shut down operations in Russia is considered a difficult one for Uniqlo, especially after the company's initial stance that clothing is a "necessity of life," and that the people of Russia have the same right to live as anyone else.
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