Uniqlo owner pledges to stay in Russia as wave of companies exit

[TOKYO] Fast Retailing Co, Asia's largest retailer and parent of Uniqlo, will continue to operate in Russia even as international pressure to isolate the country for its invasion of Ukraine has triggered waves of companies pulling out.

"Clothing is a necessity of life. The people of Russia have the same right to live as we do," chief executive officer Tadashi Yanai said in e-mailed remarks first published by Nikkei. Yanai said he is against the war, and urged every country to oppose it, but said all 50 Uniqlo stores will continue to operate in Russia.

"There should never be war. Every country should oppose it. This time, all of Europe clearly opposes the war and has shown its support for Ukraine. Any attempt to divide the world will, on the contrary, strengthen unity," he said in a statement.

A Fast Retailing spokesman said the company would "continue to monitor the situation" but there were "no plans as of now to suspend our operations". Fast Retailing said on Friday it would donate US$10 million and 200,000 items of clothing to the UN refugee agency to support people forced to flee in Ukraine and neighbouring countries.

Yanai's remarks run counter to moves by some of the world's biggest brands to exit or suspend operations in Russia, a dramatic reversal of three decades of investment by Western and other foreign businesses following the collapse of the Soviet Union in 1991.

Yanai has said he questions a trend that pressures companies to make political choices. In April last year, he declined to comment on issues around sourcing cotton from China's Xinjiang region, a month before it was revealed the US had earlier blocked a shipment of Uniqlo shirts on concerns about forced labour. The company also faces a French probe alongside a number of fashion brands.

Nike Inc and others have pledged not to use any cotton from Xinjiang at all, a step Fast Retailing has not taken yet, though the company insists there's no forced labour in its supply chain.

Russia's invasion of Ukraine has drawn international condemnation, sparked trade restrictions and financial penalties, and spurred an exodus of global companies. Fast Retailing's bigger rival Inditex is temporarily closing its 502 stores in Russia and suspending online sales.

Apple Inc and Nike Inc have also closed stores, and carmakers including BMW and General Motors Co have suspended vehicle deliveries.

The Japanese government has followed the line of the US and much of Europe in imposing a raft of sanctions, including freezing the assets of a number of Russian officials and oligarchs, as well as those of financial institutions including Russia's central bank.

So far, Japanese companies are split. The country's biggest carmakers Toyota Motor Corp and Honda Motor Co said they are halting vehicle shipments to Russia, while a business lobby warned trading giants Mitsubishi Corp and Mitsui & Co not to rush into exiting from a Russian oil and gas project. Japan Tobacco Inc, which has a 37 per cent stake of the Russian market, continues to operate in Russia and says it is "fully committed" to complying with national and international sanctions.

BLOOMBERG, AFP