Topline
The Ukraine Ministry of Defense criticized French-based retailer Leroy Merlin on Monday following reports that the home-improvement chain, part of a sprawling holding company founded by one of the world’s most famous retail dynasties, was seeking to bolster operations in Russia to capitalize on the dearth of supply after several rivals shuttered stores in protest of the Ukraine invasion.
Leroy Merlin “became the first company in the world to finance the bombing of its own store,” the … [+]
Key Facts
Leroy Merlin “became the first company in the world to finance the bombing of its own stores,” Ukraine’s Ministry of Defense said on Twitter Monday morning, sharing an image of a store seemingly destroyed during the attacks in Ukraine, and affixing the hashtags #IsolateRussia and #StopRussianTerrorism.
Though the government agency didn’t specify why it was singling out the retailer, the comment follows a Saturday report that management-level employees at the Russian arm of Leroy Merlin were touting “significantly increased” sales after several Western competitors, including Ikea, shuttered stores in response to Russia’s invasion of Ukraine.
In a letter obtained by the Telegraph, high-level Leroy Merlin employees asked partners to increase supply to help meet demand following the “disappearance of certain companies from the [Russian]
market,” and said the company plans to “fully replace imported products” with Russian-produced products in the next three to four months.
Leroy Merlin-parent Adeo did not immediately respond to Forbes’ request for comment on Monday, but a company representative earlier this month issued a statement saying Leroy Merlin’s 112 stores in Russia were “operating normally” and had no plans to change operations.
Association Familiale Mulliez (AFM), Adeo and Leroy Merlin’s holding company, controls a vast network of some 20 retail chains across the world and is largely owned by billionaire Michel Leclercq and the Mulliez family, the famed retail dynasty behind Auchan department stores; each hold a roughly 40% stake in the firm.
The Ukraine Defense Ministry isn’t alone in condemning the firm: “Companies like that have no moral right to exist,” Lesia Vasylenko, a Ukrainian member of parliament, told the Telegraph, asking the French government to intervene and adding: “There should be solidarity. There should be pressure being applied.”
Key Background
The economic fallout since Russian President Vladimir Putin ordered an invasion of Ukraine late last month has intensified amid a growing list of sanctions targeting the Russian government, businesses and oligarchs. Hundreds of companies have left Russia in response to the violence, but dozens have said they will remain despite growing pressure to exit the market. Among the biggest, Nestle was criticized by Ukrainian Prime Minister Denys Shmyhal last week for staying in the Russian market, sparking calls for a boycott of Nestle products on social media. Other businesses still operating in Russia include Koch Industries, Burger King parent Restaurant Brands International and an independent Papa John’s franchisee (the chain suspended corporate operations on March 9).
People gathered outside the French Leroy Merlin store in Gdansk, Poland last week to protest the … [+]
Chief Critic
“The hypocrisy and the cynicism of how they make their money is just astonishing,” Vasylenko said. “They are okay making money while the blood of Ukrainian children is flowing.”
Big Number
$4 billion. That’s how much Leclercq, who started AFM’s sporting goods store Decathlon in 1976, is worth, according to Forbes. Decathlon is now one of the world’s largest athletic retailers, with more than $15 billion in sales from some 1,500 stores in 51 countries. Leclercq’s cousin is Gerard Mulliez, the 90-year-old patriarch of the Mulliez family who was at one point worth more than $10 billion.
Further Reading
Koch Industries, Nestle, Renault—Here Are The Companies Under Fire For Russian Ties (Forbes)
Multinationals Continuing Sales In Russia Under Mounting Pressure To Take Stronger Action (Forbes)
Verizon, Pfizer, Deutsche Bank—Here Are The Companies Cutting Ties With Russia Over Ukraine Invasion (Forbes)
French founders of Decathlon face outrage over Russian expansion plan (Telegraph)
Source: https://www.forbes.com/sites/jonathanponciano/2022/03/21/inhumane-harrowing-greed-ukraine-slams-billionaire-linked-retailer-for-reportedly-plotting-russia-expansion-amid-invasion/