Health Food And Remedies Retailer Leads Great Russian Decoupling

The likelihood of U.K.-based health food and natural remedies retailer Holland & Barrett being caught up in global events would, before the past week, be at best described as ‘slim’.

The company first opened its doors in 1870 and has grown to become Europe’s largest health and wellbeing retailer, offering vitamins and supplements, natural beauty, active nutrition and ‘free from’ foods, with stores across the U.K., Europe, Asia and the Middle East.

Yet here we are, in unprecedented times as the great Russian retail decoupling builds up a head of steam.

Russian oligarch Mikhail Fridman stepped down from the board of the company that owns Holland & Barrett this morning after being slapped on a sanctions list by the European Union.

His private equity firm Letter One bought the retailer – best known as a popular high street and mall based vitamin and supplement seller – from rival buyout group Carlyle for $2.4 billion in 2017.

However, he and business partner Petr Aven have now resigned from the board of Letter One, which is chaired by banker Lord Mervyn Davies, a former U.K. Labour government minister.

Billionaire Fridman and Aven set the firm up in 2013 following the $13.4 billion sale of their stake in oil group TNK-BP to Rosneft. The pair still own almost 50% of LetterOne.

For its part, Holland & Barrett said: “We are not affected by any sanctions, nor do we expect to be.”

Fridman Added To Sanctions List

On Monday the E.U. added Fridman to its sanctions list following Russia’s invasion of Ukraine, describing him as “a top Russian financier and enabler of Putin’s inner circle”, while Aven was described as one of Putin’s “closest oligarchs” by the E.U.

As a result, the E.U. has frozen his assets in member countries and banned him from travelling within the bloc. Fridman said he was shocked by the allegations and would contest them.

Fridman and Aven added that they would “contest the spurious and unfounded basis for the imposition of these sanctions vigorously and through all means available to them”.

The news comes after a Twitter backlash over the Russian ownership of Holland & Barrett, with many posters threatening to boycott the retailer.

The news comes as many companies are ‘decoupling’ from Russia including, from the world of retail, Asos, Boohoo, Adidas, Nike
NKE
, Apple
AAPL
and H&M, with more sure to follow as the reputational damage of being associated with Russia increases among consumers.

This week Russian e-commerce giant Ozon had its shares suspended on the Nasdaq, with is stock value in free fall.

Holland & Barrett Global Expansion

The move comes at a time of rapid expansion for Holland & Barrett which, in January, signed a new partnership deal to open stores across Greece, Romania and Bulgaria.

The health and beauty retailer has teamed up with FOURLIS Group, which already operates stores across these territories for brands such as IKEA, Intersport and Athlete’s Foot. It aims to open 120 Holland & Barrett stores over time, with the first outlets and a Holland & Barrett website scheduled to launch simultaneously this year.

Holland & Barrett chief commercial officer, Alex Dower, said at the time: “H&B is fast becoming a true global brand, with H&B product available in stores and online in 18 countries around the world with more planned for the future.”

Holland & Barrett also acquired at-home beauty services company Blow late last year. The Blow app serves customers across London, the South East of England, Birmingham and Manchester, offering a range of beauty services.

The company has 1,600 stores worldwide, of which nearly 900 are in overseas markets, and employs more than 7,000 staff. Its largest store estates outside the U.K. are Hong Kong, India and the Netherlands. It has no stores in Russia.