Mothercare, the retailer of products for young children and their parents, has joined the list of multi-national companies halting business in Russia and warned it will be taking a big financial hit in the process.
The company revealed on Wednesday morning that its decision to suspend operations would result in a hit of up to a quarter of its usual global revenue. Shares fell by 25% in response.
It made the announcement hours after some of the world’s biggest consumer brands, including McDonald’s, Pepsi and Coca-Cola, bowed to intense pressure and revealed they would also halt trading in Russia over the invasion of Ukraine.
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Burger King is among names yet to follow suit.
Mothercare operates as a brand franchise operation after its UK store arm was placed in administration in 2019 to protect the wider brand business.
The company said in its statement: “Mothercare announces that all business in Russia, including shipment of all products, has been suspended.
“Our local partner has confirmed that it will be immediately pausing operations in some 120 stores and online.
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“Russia represents around 20-25% of Mothercare’s worldwide retail sales and was previously expected to contribute around £0.5m per month to group profit.”
Energy, payment, entertainment and major technology firms including the likes of Apple, Microsoft and Samsung have shuttered operations or cut ties with Russia since president Putin’s military operation began last month.
Among the more recent companies to act was KFC’s owner, which said on Tuesday it was suspending operations of its 70 KFC company-owned restaurants in the country and finalizing an agreement to suspend all Pizza Hut restaurant operations in Russia, in partnership with its master franchisee.
Yum Brands, which has at least 1,000 KFC and 50 Pizza Hut locations in Russia that are nearly all independent franchisees, added that all investment in the country had been halted.
Unilever – the UK-based consumer goods giant behind brands such as Dove soap, Marmite and Knorr – was another to reveal its hand.
Key developments:
• US bans Russian oil imports and UK will phase them out by end of year
• US says Poland’s offer of MIG-29 fighter jets to be passed to Ukraine ‘not tenable’
• Criminal offence for any Russian plane to enter UK airspace, says transport secretary
• First Lady Olena Zelenska writes open letter condemning Putin and ‘mass murder of civilians’
• Woman charged in New York with being a Russian agent for more than a decade
It suspended all imports and exports of its products into and out of Russia and said that it will not invest any further capital into the country.
The company condemned the war in Ukraine as “a brutal and senseless act by the Russian state” but added that it will continue to supply everyday essential food and hygiene products that are made in Russia to people there.
That decision, the company said, was to be kept under review.
Another UK-listed firm to say it was suspending all operations in Russia was Imperial Brands, the tobacco firm.
The maker of Lambert & Butler cigarettes and Backwoods cigars said it would continue to pay Russian staff.
Heineken and L’Oreal were other companies to confirm the effective closure of their respective operations in Russia on Wednesday.
Meanwhile, Nestle said it was suspending all capital investment in Russia but would continue to supply essential food products.
Burger King told Sky News it was committing $3m to support Ukrainian refugees.
“BK Russia is a standalone business owned and operated by our franchisees in the country,” the company said.
“We have long-standing legal agreements that are not easily changeable.”