Levi Strauss does not expect to be able to reopen in Russia this year, its chief executive said on Wednesday, a month after the Californian jeans maker “temporarily” suspended operations there in response to Ukraine’s invasion of Ukraine. Vladimir Poutine.
“The way things are going right now, I’m not optimistic we’ll be back in full force soon,” Chip Bergh told the Financial Times, adding that his forecast now assumes there will be no more revenue in 2022 from a market that contributed about 2 percent of sales last year.
Levi’s still pays more than 800 employees in Russia and has kept a few factory outlets open “to clear out inventory,” he said, but “every day when you open the newspaper it gets worse.”
Conditions for Western companies in Russia were “really difficult”, Bergh said, noting that authorities had assumed powers that could allow them to nationalize the operations of companies that stop supplying Russian customers.
“They could literally take our mark,” he warned, echoing a concern other leaders have expressed privately.
A Boston Consulting Group survey, released this week, found that two-thirds of investors expected it to take at least two years before Western companies would be willing to operate in Russia again, including 39% who said it would take five years or more.
However, few CEOs have made public projections about how long they might be shut out of the Russian market.
Despite the question hanging over Russia, Levi’s reaffirmed its full-year guidance after posting first-quarter revenue and earnings per share above consensus estimates.
Read more about Levi’s outlook on Russia here.