Nike will officially exit the Russian market.
The decision, first reported by Reuters Thursday and confirmed in a note on Nike’s Russian e-commerce site, followed months of incremental moves that dramatically decreased the company’s presence in the country.
“Company Nike Inc. made a decision to exit the Russian market,” the updated message said, according to Google Translate. “Therefore, Nike.com and the Nike mobile app will be no longer available in this region. Nike stores recently temporarily closed and will not open again.”
A spokesperson for Inventive Retail Group, a Russian franchisee operating the majority of still-operational Nike locations, said Thursday that its stores would fully close once they run out of stock. So far, 15 of its 37 locations have closed, the spokesperson confirmed. This number matches up with the store directory on IRG’s website. On May 25, the IRG directory listed nine locations as “temporarily closed.”
“NIKE, Inc. has made the decision to leave the Russian marketplace,” the company said in a statement. “Our priority is to ensure we are fully supporting our employees while we responsibly scale down our operations over the coming months.”
In March, chief financial officer Matt Friend told investors that Nike’s business in Russia and Ukraine represented less than 1 percent of total company revenue.
The company’s withdrawal began less than a week after President Vladimir Putin’s initial invasion of Ukraine. In a note published to the front page of Nike’s Russian website, the Swoosh brand declared it could no longer guarantee delivery of goods to its customers in the country and, as a result, merchandise purchases on Nike.com and the Nike app would be “temporarily unavailable” in the region. Days later, it announced it would temporarily close all its stores in Russia.
By mid-March, it became clear that these closures would not affect independent Nike stores, with Reuters reporting that at least six shops remained open. Last month, however, the Moscow-based daily Vedomosti reported that Nike declined to renew its franchise agreement with IRG, its largest Russian franchisee, and Yar LLC, a Siberian-focused franchisee. Both deals were set to expire May 26.
According to Vedomosti, IRG president Tikhon Smykov told employees that Nike could not “in the foreseeable future” ship goods to Russia. With no remaining inventory to sell, the company “will be forced to close all of its stores under this brand,” he added.