Image Source: Bloomberg
Lego, the largest toy manufacturer in the world said it would stop all of its business in Russia “indefinitely” as a result of the nation’s invasion of neighboring Ukraine.
The company didn’t give a specific explanation for the withdrawal, although it did mention that there had been “disruption” in trying to run its activities.
A collaboration with Inventive Retail Group, which runs the company’s 81 stores in Russia and employment of its personnel in Moscow, will both expire as a result of the move.
The contract with Lego has been cancelled, according to IRG, which also manages stores for Western companies like Nike and Samsung in Russia.
Lego warned in June that some of its outlets would be temporarily frozen owing to supply concerns after pausing its shipments to Russia in March.
In an effort to circumvent import restrictions related to the situation in Ukraine, Russia included Lego products in a list of items that might be brought into the country without the permission of the intellectual property owner in early May. On the list put out by the ministry of industry and commerce were smartphones from Apple and Samsung, well-known automakers, video game consoles, and replacement parts used in many other industries.
Earlier on Tuesday, Inc. Magazine’s Russian edition ran a story saying that Lego had ended its contract with IRG and would no longer do business in Russia.
One of the few Western companies still operating in Russia is the Danish company Lego. This happened after a non-official economic embargo was put in place because McDonald’s, Starbucks, and Nike were moving into the Ukraine.
Many western brands have left Russia because of sanctions and threats from the Kremlin that foreign-owned assets will be taken.
Some businesses, like Burger King, had locations in Russia that were run by franchisees. They had to end their contracts with these representatives, mostly by selling their real estate and shares in the country.