Following Sanctions Against Russia's Invasion Of Ukraine, Nike And IKEA Choose To Close Outlets

Illustration of the Nike outlet. (Unsplash/Craig Lovelidge)

JAKARTA - Shoe makers Nike to furniture company IKEA closed stores in Russia on Thursday, due to trade restrictions and supply constraints, adding to political pressure for companies to stop business in Russia due to the invasion of Ukraine.

Meanwhile, French bank Societe Generale said it was working to reduce its risks in Russia, fearing a reciprocal response by Moscow to Western sanctions, as more companies shut down business there, from vodka maker Diageo to Toyota.

Globally recognized companies including Apple, Ford and Shell have condemned the Russian attack, but some of Thursday's announcements were more practical, focusing on supply and sanctions, as shipping routes were closed and the government banned exports to Russia.

Boeing Chief Executive David Calhoun, in a note to staff, acknowledged the violence in Ukraine but avoided politics.

"Going forward, Boeing will continue to follow in the footsteps of the US government and strictly adhere to the announced export controls and restrictions governing employment in Russia," he said in a note seen by Reuters, which described the suspension of jobs in Russia. and Ukraine, reported Reuters March 4

Meanwhile, Brazilian aircraft maker Embraer joined Airbus and Boeing in stopping the supply of spare parts to Russian airlines.

Home furnishings retailer IKEA said it would close stores in Russia and Russia's ally Belarus, impacting 15,000 workers, and described the closures in non-political terms.

"The war had a huge humanitarian impact and resulted in serious disruptions to supply chains and trading conditions, which is why the group of companies decided to temporarily suspend IKEA's operations in Russia," IKEA said in a statement.

IKEA illustration. (Unsplash/billow926)

Nike Inc., said it was deeply troubled by the devastating crisis in Ukraine" and described its store closures as follows: "Given the rapidly evolving situation, and the increasing challenges in running our business, Nike will cease operations in Russia."

Unlike previous companies, a number of companies, including McDonald's Corp. and PepsiCo, have been tight-lipped about the plans.

Underlining the challenges global companies face as they comply with sanctions against Russia, Societe Generale said Thursday it could look at an "extreme scenario" in which Russia strips banks of its local operations. The lender has $20 billion of exposure to Russia.

Citigroup Inc said on Wednesday it could face billions of dollars in losses due to its exposure to Russia, and wants to get out of Russian assets. Bank shares have fallen in recent days on fears of a possible decline in value and a weaker economy.

Western sanctions, including closing several Russian banks from the SWIFT global financial network, new export controls and airspace closures, have caused dozens of global companies to temporarily suspend operations in the country, hitting the ruble and forcing central banks to raise interest rates.

Spanish fashion retailer Mango said on Thursday it was temporarily closing shops and online sales sites in Russia, and Spirits Diageo, which makes Smirnoff vodka and Guinness, said it had halted exports to Ukraine and Russia.

Intel and Cisco said they had stopped selling in Russia. Accenture said it would discontinue its business in Russia, which has nearly 2,300 employees.

To note, hundreds of Russian soldiers and Ukrainian civilians have been killed and more than a million people have fled Ukraine in the week since President Vladimir Putin ordered the attack.

Russia has called its actions in Ukraine a special operation it says was designed not to occupy territory but to destroy the military capabilities of its southern neighbor and capture what it considers dangerous nationalists.