THE Russian arm of Domino’s Pizza is filing for bankruptcy after facing a “challenging environment” in the increasingly pariah state.
Russians will no longer have access to the much-loved chain as its owner, DP Eurasia, has made the decision to exit the country and close all 142 stores.
AlamyDomino’s Pizza will be shutting all of its 142 stores in Russia after filing for bankrupcy[/caption]
Getty – ContributorThe company cites ‘challenging conditions’ as its reason for exiting Putin’s soil[/caption]
The London-listed company, which also owns Domino’s franchises in Turkey, Georgia and Azerbaijan, reportedly failed to find a buyer for its Russian operator and decided to cut its losses and get out.
In December, DP Eurasia said it would consider pulling out of Russia due to the ongoing impact of sanctions on the fast-food chain, which was helping to rack up millions in debt.
However, today it announced that the company would end its operations and pull out of the country altogether.
Domino’s is the third-largest pizza delivery company in Russia and it is too early to determine the likely devastating financial impact of the bankruptcy.
DP Eurasia had long-faced criticism of continuing its business on Vladimir Putin’s soil – even being named and shamed by UK ministers last year.
Today’s statement explained the company had filed for bankruptcy of its Russian arm.
“This is preceded by the announcement on 28 December 2022, which confirmed that the company was evaluating its presence in Russia, the impact of sanctions, and its continuing ability to serve its customers in Russia.
“With the increasingly challenging environment, DPRussia’s immediate holding company is now compelled to take this step, which will bring about the termination of the attempted sale process of DPRussia as a going concern and, inevitably, the group’s presence in Russia.”
The Russian economy has been hit heavily by sanctions since Putin’s full-scale invasion of Ukraine in February, 2022.
In the wake of the war, many multinationals operating in the country scrambled to re-assess their ties with Russia.
Swift exits followed, with companies usually incurring heavy losses by selling at huge discounts or handing the keys to local management.
This trend included McDonald’s first closing its stores in March, 2022 following international outcry.
The fast-food chain then decided to sell its business in Russia after 32 years of operations in May of last year.
It found that running 850 restaurants in the country was “no longer tenable” or “consistent with McDonald’s values”.
Other giants including Coca-Cola, Starbucks, Pepsi withdrew from Russia or paused operations, while iconic brands such as Netflix, Levi’s, Burberry, Chanel and Uniqlo also followed suit.
The pace of exits has now slowed substantially but the rules are even harder to navigate for those remaining.
Executives have said gaining government commission approval is a lengthy and difficult process.
It comes as Russia faced a further blow after its first moon mission in 50 years ended in failure when it spun out of control and crashed.
The 800kg Luna-25 robotic probe was smashed to pieces as it plunged from orbit onto the surface of the moon, having not yet completed any of its year-long mission.
Meanwhile, Putin faces fresh humiliation at home as recent Ukrainian kamikaze drone attacks have struck deep into his homeland and brought the war nearer to his doorstep.
Today, an aerial assault was launched at Moscow, while one of Putin’s prized Tu-22 nuclear bombers was destroyed over the weekend by drones.