One ruble for exiting, three for entering: when will Uniqlo, H&M, and Zara return, and what will they pay for their departure
The Union of Shopping Centers of Russia is calling large Western fashion brands back and assuring that negotiations with them, though in private, are already underway. With the political will in place, their return could happen in a year. However, brands will have to pay a hefty price for their demonstrative exit: they will need to find new retail spaces, set up offices, spend on advertising, and fight for their place in the market.
Not a Blank Slate Anymore?
The proposal for Uniqlo, H&M, and Inditex to return was made by Bulat Shakirov, the head of the Union of Shopping Centers.
— There’s no doubt about it, Russia is a huge market, and no one wants to lose it. The question is whether we will be ready to accept them, as most of the space in shopping centers is already occupied. They’ll have to enter on ordinary market terms, and we will still remember their actions; the residue will remain, — the expert said to NSN.
Later, Dmitry Peskov, the press secretary for the Russian president, commented on the situation. He admitted that no direct communications from Western fashion brands had been received at the Kremlin. However, if they return to Russia and continue to compete with Russian manufacturers, “it would be completely normal international trade practice.”
Meanwhile, in St. Petersburg and its suburbs, only 3.1% of shopping center spaces are currently vacant, according to NF Group. For comparison, during the peak of exits in 2022, this figure was 10.6% on average in the city. In key shopping centers, the vacancy rate was even 14.6%.
For example, in Moscow, according to Nikoliers analysts, 173.5 thousand square meters of retail space (13 properties) were introduced in 2024, with another 620 thousand square meters planned for 2025. In St. Petersburg and its agglomeration, the results are much more modest. In the past year, no shopping centers were completed (which was a record low since 2000), and in 2025, only 139 thousand square meters are planned. However, even here, things aren’t smooth. Of the 139 thousand square meters, about 115 thousand should be occupied by the HOLLYWOOD shopping center, whose opening has been postponed several times.
It is important to clarify that Western brands used to prefer entering “blank slate” — new shopping centers — before.
The Union of Shopping Centers explains: the problem is not only with the availability of retail space. There’s also the need to resolve cross-border payments, logistics, “bring back” offices, invest in advertising, and remind Russians about themselves. All of this could cost brands a pretty penny.
Living by Collections
As Pavel Lyulin, vice president of the Union of Shopping Centers, explained in an interview with 78.ru, there are no specific deadlines for brands to return yet, but with the right political will and a thaw, this could happen in about a year.
The fact is that retailers need to resolve not only the issue of retail space but also clarify other equally important aspects, such as cross-border payments in foreign currency and the restoration of normal logistics.
— Solving these problems would also be in the interest of Russian businesses. It’s no secret that many domestic brands are also outsourcing abroad and/or importing materials from there, — Pavel Lyulin explained.
As the expert noted, the fashion industry, unlike classical retail, works in “collections” from season to season. That is, it takes time to manufacture, transport, and so on.
Also, the problem of finding offices, which were also liquidated amid the mass exodus, organizing advertising processes, and so on, adds to the complexity.
— Therefore, the return could cost Western brands a great deal. Much more than when they first entered and loved to do so from scratch in new shopping centers. Nobody is saying that the issue with retail space is insignificant. For example, in St. Petersburg’s “Gallery” shopping center, Uniqlo held on till the last, but now Lime has taken its place. It is also clear that Russian brands (Gloria Jeans, Zarina, Love Republic, and Befree) have also strengthened their positions and are not willing to give up their place without a fierce battle, — Pavel Lyulin emphasized.
“We Don’t Plan to Convince Them”
The last thesis about the potential intense battle between Russian and foreign brands in the future is confirmed by Sofya, the marketing director of the “Passage” shopping center.
— The “Passage” shopping center has chosen a certain direction, which has shown very good results. The first department store of premium Russian brands has more than doubled its turnover figures.
We and our residents like the chosen concept, and we plan to continue with it. Therefore, we do not plan to convince foreign brands to return. We are ready for anything and currently feel confident, — she states.
Maxim Levchenko, managing partner of Fort Group (owners of “Europolis” shopping center, “City Mall,” “London Mall,” “Rodeo Drive,” etc.), reminds that earlier, developer companies’ strategy was to introduce millions of square meters of retail space in Russia. Networks had the opportunity to open dozens and hundreds of their stores in shopping centers.
— Now the situation is fundamentally different, as is well known, an empty space doesn’t stay empty for long, — Maxim Levchenko emphasizes.
As he notes, the vacated spaces were quickly filled by Russian brands.
Nowhere to Go?
Natalia Kireeva, deputy regional director of consulting and analytics at NF GROUP, confirms: in the shopping centers of St. Petersburg, including nearby suburbs, 3.1% of retail space is vacant.
According to the expert, no new shopping centers were opened in St. Petersburg in 2024, and three out of five planned for 2025 are small-format properties, where foreign brands are always represented in minimal amounts.
— Thus, the return of international retailers is possible either through rotation or through partially vacant spaces in large construction projects such as Hollywood and “Park Mall,” — she concludes.
Aleksey Popikov, head of shopping center department at Becar Asset Management, is ready to report an even smaller vacancy rate. According to him, it is actually 2%.
— Yes, in 2025, this overall figure will slightly increase due to the opening of new shopping centers in Murino and Novogorelovo on Prospekt Prosveshcheniya. But overall, returning brands simply have nowhere to go. The spaces they occupied earlier have already been taken by Russian brands: Gloria Jeans has taken the H&M spaces, “Megamarket” occupies IKEA’s, and some of the “departed” networks have simply rebranded and opened under new names, — he explains.
It’s worth noting that in recent days, news about the return of Western brands that demonstratively left Russia in 2022 have been coming in “batches.” And this concerns various market sectors. On Monday, February 17, it was revealed that payment systems Visa and Mastercard have plans to return. European, Japanese, and Korean car brands are also planning to return to Russia.