Nike Also Leaves Russia... "Will Not Renew Contract with Russia's Largest Franchise"

Following McDonald's and Starbucks, Withdrawal from the Russian Market Continues

Nike store, an American sports brand [Photo by Yonhap News]

[Asia Economy Reporter Kang Woo-seok] The American sports brand Nike has decided not to renew its contract with Russia's largest franchisee.

According to a report by Reuters on the 25th (local time), citing the Russian economic newspaper Vedomosti, Tikhon Smikov, CEO of Inventive Retail Group (IRG), which sells electronics and sportswear in Russia, informed employees in a letter that Nike will no longer supply products to Russia.

The letter stated, "Due to the depletion of supplied products, IRG has no choice but to close all stores operating under the Nike brand." It also hinted at Russia's invasion of Ukraine, saying that after 10 years since Nike started its business in Russia with IRG in 2012, "the business is now in a situation where it cannot exist."

IRG has been operating Nike stores in Russia through its subsidiary Up&Run. There are a total of 37 stores operated by Up&Run, and according to the website, 28 of them are still open.

According to the Russian Patent Office, contracts between Nike and other franchisees such as Up&Run, A3 Sports, and Yar will expire on the 26th.

In March, Nike announced it would temporarily suspend operations of all stores in Russia in response to Russia's invasion of Ukraine. It also mentioned that stores continuing operations are run by separate partners, not Nike headquarters.

Meanwhile, major Western companies are rushing to withdraw from the Russian market. Recently, McDonald's and Starbucks announced their withdrawal, and companies such as ExxonMobil, Shell, British American Tobacco (BAT), and Renault have also decided to exit the Russian market.