The latest Western company to leave the Russian market.

The Russian branch of luxury fashion house Hugo Boss operates 19 stores in Moscow, the Moscow region, St. Petersburg, and Rostov-on-Don. Photo: UNN

In late April, Hugo Boss agreed to sell its Russian business. The Russian authorities require Western companies selling their assets in Russia to pay a mandatory 50% discount and contribute an additional 15% to the budget.

According to Reuters, the deal to sell Hugo Boss's Russian branch was finalized on August 2nd. One of the conditions of the sale was that all jobs must be preserved.

"We can confirm that our subsidiary in Russia has been sold to Stockmann JSC – a company that is one of Hugo Boss's long-standing wholesale partners in the country," a Hugo Boss representative said.

Following Russia's launch of a special military operation in Ukraine in February 2022, Hugo Boss closed its stores in Russia, suspended online sales in the Russian market, and ceased advertising. At the end of 2022, Hugo Boss Rus had 19 stores in Moscow, the Moscow region, St. Petersburg, and Rostov-on-Don.

Amidst the extensive sanctions imposed on Russia by the US and EU, many Western companies have announced the suspension of operations in this market or their complete withdrawal.

One of the first German companies to announce its withdrawal from Russia was Volkswagen. The announcement came just weeks after the conflict began. A year later, the company sold its Kaluga plant for 160 million euros.

However, according to Die Zeit, in early June of this year, Volkswagen did indeed return to the Russian market, beginning to sell cars under the Jetta brand. These are similar models recycled from original vehicles manufactured by the Chinese FAW Group using German components.

The Jetta has long been imported into Russia under a parallel import program, but according to Die Zeit, Jetta Motors announced its official launch to Russian business media a few weeks ago.

Volkswagen itself stated that it knew nothing about the business operations in Russia. However, as this publication emphasizes, this "seems rather illogical."

Before the outbreak of hostilities, Volkswagen employed 4,000 people in Russia, and the German group's investment in production amounted to 2 billion euros.

Minh Duc (According to RFE/RL, Moscow Times)