Shoemaker Geox suspends new direct investments in Russia (updated)
13/05/2022 11:41
(Updates dateline, adds background, spokesperson comments)
By Federico Maccioni
May 13 (Reuters) - Italian shoemaker Geox said it had
suspended new direct investments in Russia, such as marketing
and communications and the opening of new stores, as it grapples
with the challenges of reducing its exposure to the country.
A spokesperson for Geox GEO.MI , which mainly operates in
Russia and Ukraine through third parties, told Reuters on Friday
that a final decision on its strategy been taken at the
beginning of May, following discussions when began after Moscow
invaded its neighbour in late February.
Directly operated stores in Russia, which account for 30% of
Geox's business there, were still open, the spokesperson said,
adding that commercial agreements with franchising and wholesale
retailers remained in place due to contractual obligations.
Geox was one of more than 200 Western companies that had
been continuing business as usual in Russia up until now,
according to data from the Yale School of Management https://bit.ly/3L5x2sZ.
"It's not easy to leave," the spokesperson said, adding that
70% of Geox's business in Russia had been developed through
wholesale business and franchising.
Geox had cancelled all new orders from third parties in
Russia and was withdrawing its "European management", the
spokesperson said, referring to the resignation of two Italian
managers who were working remotely as members of the board of
Geox's Russian business.
On Thursday, Geox reported a 24.3% rise in first-quarter
revenues at current exchange rates to 184.4 million euros
($191.5 million) and said it expected 2022 revenues to top 700
million euros, noting the target could become "challenging"
should no solution to the Ukrainian crisis be found soon.
($1 = 0.9630 euros)
(Reporting by Federico Maccioni; Editing by Alexander Smith)
((Federico.maccioni@thomsonreuters.com; +39 3420768883;))