Will Big Fashion Brands Return to Russia?

H&M Group says it has no plans to reopen in Russia. Uniqlo owner Fast Retailing, too, sees “no foreseeable prospects” to resume operations. But other brands, including Zara parent Inditex, appear to be staying mum about a potential return to a market they left in far less equivocal terms when President Vladimir Putin’s forces invaded Ukraine.

The question has become pertinent in light of the Trump administration’s eagerness to end the war, even though it appears to be putting the onus on Ukraine to accept a deal that was seemingly made without the country’s input, or indeed that of any other European ally. With that has come a striking shift in U.S. policy, one that saw Marco Rubio, President Donald Trump’s secretary of state, declaring to a Moscow delegation in Riyadh recently that the United States could explore the “incredible opportunities that exist to partner with the Russians,” both economically and geopolitically, if the fighting came to an end. 

It’s an astonishing turnabout from both U.S. foreign policy and the aggressive sanctions that Biden’s White House imposed following what it described as Putin’s “murderous assault.” Trump has falsely blamed Ukraine for starting the war and therefore undeserving of a seat at the table during peace talks with Russia. He has taken to social media to call Ukraine’s president, Volodymyr Zelensky, a “dictator without elections” who has “done a terrible job” in office. Unlike his predecessor, Trump has refused to apply the same epithet to Putin. The tariffs he had originally threatened Russia with if it kept up the fighting have also apparently evaporated.

In a move said to have angered and frustrated European leaders, the United States voted against a United Nations General Assembly resolution that condemned the invasion on Monday, the third anniversary of the start of Russia’s full-scale attack on Ukraine. Instead, it provided a three-paragraph resolution—one that neither mentioned the former’s role as aggressor nor the latter’s position as a victim—that implored a “swift end to the conflict and…a lasting peace between Ukraine and Russia.”

Also on Monday, Trump claimed that the conflict could be over “within weeks.” Last week, he said that the fallout of the war mattered more to Europe than the United States, which is separated from the conflict by a “big, beautiful ocean.”

Leaving Russia, a lucrative market for apparel consumption, badly dinged many bottom lines, said Sheng Lu, professor of fashion and apparel studies at the University of Delaware. Before the war, Russia’s annual retail sales for designer ready-to-wear apparel and footwear exceeded $3 billion, eclipsing sales in many Western markets, including Canada ($2.6 billion), Spain ($2.4 billion) and Australia ($2.1 billion). Luxury fashion sales have since plummeted to below $0.9 billion in 2024, with a similar trend in the value and mass market segment that saw H&M, once 30 percent of Russia’s clothing retail sales fall to below 0.1 percent as of 2023.

But whether brands will flock back to Russia is uncertain. For some, the question is moot: European Union sanctions still forbid the transfer of luxury goods to “any natural or legal person, entity or body” in Russia or for use in Russia, meaning that imports from rarified names like Chanel, Hermès and Louis Vuitton are still technically frozen, even though goods are reportedly still making their way to consumers through intermediaries and other back-door channels. Others have wound up their business altogether, such as off-price retailer TJX, which sold its minority stake in Russian retailer Familia, or Nike, which cut ties with its Russian franchisees.

There is also the reputational risk to consider, Lu said, adding that doing business with Russia would almost certainly invite “intense scrutiny and raise controversies from consumers, civil society and other advocacy groups concerned about ethical business practices in the country.” And even if Trump and Putin reached an agreement, lifting economic sanctions on Russia would still be a “complex and lengthy process” because of the interconnectedness of global supply chains.

Even so, Russian state media reported last week that a trade group representing hundreds of the nation’s shopping malls wrote to H&M, Fast Retailing and Inditex urging them to reopen. It comes just months after the Russian Council of Shopping Centers said that nearly one-quarter of Russian malls are at risk of closing in the coming year due to a combination of exiting Western brands, increasing operational costs and mounting competition from online marketplaces. A representative from H&M said it received no such letter, while Fast Retailing did not respond to that specific query. Inditex, which offloaded its Russian business to Emirati conglomerate Daher Group in 2022, said it would not be making any comments, although it had not ruled out a possible return at the time of the sale.

Neil Saunders, managing director of GlobalData Retail, a market analytics firm, said that while going back to Russia could work out in theory, doing so would be much more of a minefield in practice. Companies would be going back to a much-altered Russia, one characterized by double-digit inflation and labor shortages. Putin’s ever-changing rules, such as ballooning “exit taxes” on departing companies or the retaliatory confiscation of foreign asses, have only underscored the perilous nature of doing business in the country.

“I also think that even if fashion brands did find a path to reentry, it would not simply be a case of picking up where things left off,” he said. “There has been a lot of consumer change in Russia and brands might not be welcomed back with open arms.”