California Observer

Lego Suspends Operations From Russia Indefinitely

Image Source: Bloomberg

Lego the biggest toy company in the world has stopped doing business in Russia. The company has pulled out all of its asset after Russia invaded the neighboring Ukraine.

Despite not giving a specific explanation for the withdrawal. The company did state that there had been “disruption” in trying to run its activities.

The decision will put a stop to the company’s employment of employees in Moscow. And also its relationship with Inventive Retail Group, which runs the 81 outlets the company has in Russia.

Cancellation of The Contract With Lego

IRG said earlier on Tuesday that the contract with Lego had been canceled. IRG also handled stores for Western companies like Nike and Samsung in Russia.

Because of worries about getting enough supplies, Lego stopped sending toys to Russia in March.  And said in June that it was temporarily closing several outlets.

In order to circumvent import restrictions related to the crisis in Ukraine, Russia added Lego toys to a list of commodities in early May that came in without the permission of the intellectual property owner. On the list put out by the ministry of industry and commerce were Apple and Samsung smartphones, well-known car companies, game consoles, and spare parts that many other industries uses.

Earlier on Tuesday, the Russian edition of Inc. Magazine reported that Lego would end its contract with IRG and stop doing business in Russia.

After multinational companies like McDonald’s, Starbucks, and Nike moved into the Ukraine, an unofficial economic embargo was put in place. One of the few Western brands still in Russia was the Danish company Lego.

Since the Kremlin has threatened to take over foreign-owned assets, a number of western brands have left Russia to avoid breaking sanctions.

Read Also: Marriott hotel to leave Russia after 25 years

Some companies, like Burger King, had franchisees run their stores in Russia, and they had to end their contracts with these people by selling off their stock and real estate to get rid of their interests there.

Leave a Comment

Your email address will not be published.

Opinions expressed by California Observer contributors are their own.