(Bloomberg)—Sephora, the cosmetics retailer owned by LVMH, agreed to sell its Russian subsidiary, making it the latest brand to pull out of the country following its invasion of Ukraine.
LVMH is selling Sephora’s Russia business to the local general manager, the company said on Monday in an emailed statement. In early March, the group temporarily closed its Russian stores.
Sephora’s exit comes as European and US sanctions on the country have made operations in Russia increasingly complex. It joins Nike Inc. which also said last month that it was leaving Russia.
“It sounds very rational indeed that Western companies in general will not go on paying rent and labor forever in Russia if operations cannot be resumed,” Luca Solca, an analyst at Sanford C Berstein, said by email.
The move will provide “continuity” for employees, according to Sephora, which employed 1,200 workers in 88 Russian stores and in operations to support the company’s website in the country.
The new owner will operate the business under the “Ile de Beaute” brand. The transaction is subject to clearance by antitrust authorities, Sephora said.
Russia represents about 2% to 3% of the global market for personal luxury goods, according to Bain estimates.
Sephora is LVMH’s second-biggest brand by revenue after Louis Vuitton and its sixth-most profitable brand, according to HSBC estimates. LVMH doesn’t break down financial results by brand.
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