TOKYO, March 10 (Reuters) - Uniqlo owner Fast Retailing Co
and Japan Tobacco Inc on Thursday said they
would suspend some operations in Russia, in a U-turn by the
Japanese consumer giants which had indicated they would stay in
the market after Moscow's invasion of Ukraine.
The two companies were notable stand outs among major
brands, saying they would continue doing business in Russia amid
the imposition of massive trade and banking sanctions.
Tadashi Yanai, the founder of Fast Retailing had told
Japanese media that the company would continue operating its 50
stores in Russia because "clothing is a necessity of life."
But on Thursday Fast Retailing said: "While continuing our
Uniqlo business in Russia, it has become clear to us that we can
no longer proceed due to a number of difficulties.
"We condemn all forms of aggression that violate human
rights and threaten the peaceful existence of individuals."
Japan Tobacco, which controls about one-third of Russia's
tobacco market through brands including Winston and Camel, said
its subsidiary there would suspend investment, marketing
activities and a planned launch of a heated tobacco product.
"The challenges of operating in Russia at this time are
unprecedented," the company said in a statement.
Japan Tobacco, which has four factories and about 4,000
workers in Russia, is continuing manufacturing there for now,
but those activities could also be suspended depending on
changes in the operating environment, the company said.
A wave of global consumer brands, such as Nike Inc,
Levi Strauss & Co, and home furnishings firm IKEA
, have said in recent days they would halt sales and
investment in Russia.
Fast Retailing was also among major clothing companies that
faced a backlash last year over their operations in China amid
criticisms of alleged human rights abuses in Xinjiang province.
Fast Retailing insisted its sourcing in China was
sustainable, and founder Yanai told the Nikkei newspaper the
company wouldn't choose between the U.S. and Chinese markets.
The company has more than 800 stores in China, about the
same as in its home market of Japan. Staying in Russia put the
company at risk of boycotts in its bigger consumer bases, said
LightStream Research analyst Oshadhi Kumarasiri.
"We could expect such an approach when it comes to China as
the Chinese market is extremely important to the company,"
Kumarasiri, who publishes to the SmartKarma platform, told
Reuters before the Russia pullout announcement. "However, Russia
is not so important as to risk a backlash from other main
Fast Retailing will also halt online sales in Russia, the
company said. The company previously announced it would donate
$10 million and 200,000 clothing items to aid refugees from the
(Reporting by Rocky Swift, Tim Kelly, and Mariko Katsumura
Editing by Jason Neely, David Goodman, Kirsten Donovan)