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Jun 9, 2022
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Ikea instead of IKEA: Western companies have come up with a way to stay in Russia

Western brands leave, promise not to return, condemn the policy of Russia, but still … remain – changing their names to Russian and leaving the same assortment. From a legal point of view, this is a legal step if the owner of the trademark made the decision to Russify. But if not, the case may go to court. However, experts do not believe that our justice will take the side of a plaintiff from an unfriendly country.

L’Occitane stores, which announced on April 16, 2022, the closure of all retail outlets in Russia, are again accepting visitors. The range and prices are the same, discount cards issued before February 24 are working safely. Only the sign has changed. Instead of L’Occitane, the entrance is decorated with a new, Russified name “L’Occitane”.

In April, company representatives argued the closure of outlets as follows: “To protect our employees around the world from potential public aggression, we decided to close stores and online stores in Russia.” It turns out that the company tried to maintain its image by publicly expressing disapproval of the actions of the government of the Russian Federation, and not to lose profit by changing its name and reopening outlets.

This is an absolutely legal step taken by the owner himself – a cosmetic company from France, says Ivan Samoylenko, managing partner of the B&C Agency communications agency. To stay on the Russian market, the L’Occitane brand re-registered a Russian business and changed its name to Russian.

“This is a perfectly acceptable step that other international networks can take advantage of. For example, the Zara brand previously announced the possibility of changing the sign to the Russian name, although today the retailer has denied these reports, the expert continues. “No consent was required from the trademark owner in this situation: the company itself decided to change the name of its Russian representative office and registered a new brand.”

It turns out that the company now owns two trademarks: L’Occitane (used worldwide) and L’Occitane (used in Russia).

Anna Vovk, a member of the Council for Financial, Industrial and Investment Policy of the Chamber of Commerce and Industry of the Russian Federation, recalls that many Western media holdings and publications have acted in this way.

“They did not leave the Russian market, but simply rebranded, changed their shoes and kept their teams. As a result, the companies became like “a la rus”, but the broadcasting network remained the same as it was with foreign content,” she says.

How the development of the network will move forward is an interesting question, says Pavel Utkin, a leading lawyer at Parthenon United Legal Center.

“Alternatively, the remnants in warehouses will be sold at the old prices, and new receipts will already go through parallel imports, if the goods of the network have not been imported from countries with which Russia is now quietly trading,” he notes.

Meanwhile, the number of chains importing goods “by parallel import” is actively growing – from retail of equipment to watches and perfumes. And the news that this or that brand is planning or thinking about returning to Russia comes every day, but you need to understand that so far most companies are under serious political pressure.

Experts do not rule out that other international brands may follow the example of the French: from Inditex (brands Zara and Zara Home, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho) to IKEA. Some retailers have already gone the other way: they did not change the name of the network in Russia, but changed the owner. For example, Reebok stores in Russia are now owned by the Turkish holding FLO Retailing.

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