Pounded by the rapid slide of the ruble this year, the Russian outlets of clothing brands Esprit, OVS and River Island are closing their doors, business daily Vedomosti reported Tuesday.
"The company is shutting down its operations," a secretary at Maratex, the company that runs the three brands' Russian franchises, told the paper. He did not specify the reasons for the closure.
Maratex is 71 percent owned by Polish company EM&F Group. In addition to franchises of Esprit, River Island and OVS, Maratex also runs the Russian franchise of lingerie retailer Bodique.
EM&F Group's Russian business has been hit hard by the steady devaluation of the ruble and attendant rise in operating costs. Russia's currency has fallen more that 20 percent against the dollar so far this year, and the slide shows no sign of ending.
The group's losses from currency conversions doubled in the first half of this year, reaching 6.9 million Polish zloty ($2.1 million), Vedomosti said, citing a copy of EM&F Group's half-year report.
Earlier this year, EM&F Group announced plans to rid itself of certain clothing and shoe franchises due to "unsatisfactory results," but did not specify which assets in particular it planned to shed.
Other retailers have also pulled out of the market this year as the ruble sinks and uncertainty over Russia's economic prospects shakes investors. Finnish retailer Stockmann recently announced plans to close 80 percent of its SeppКlК clothing retail stores in Russia.
EM&F Group, Esprit, OVS and River Island did not respond to Vedomosti's requests for comment.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
