EXCLUSIVE Gap says Russia deliveries stopped in March. But its clothing kept coming.

NEW YORK/LONDON/ISTANBUL, Oct 31 (Reuters) – In March, clothing retailer Hole Inc (GPS.N) joined quite a few Western businesses in asserting that it was halting deliveries to Russia to protest its invasion of Ukraine.

“As a values-led corporation, 1 that is proud to do the ideal thing above the past 53 many years in organization, at this time, we have also suspended deliveries to Russia, exactly where we have a compact franchise existence,” the San Francisco-based mostly corporation declared in a March 10 information to its staff.

But Russian customs data reviewed by Reuters exhibit that concerning March 11 and July 16, Gap’s franchisee in Moscow acquired 1,585 outfits shipments with a declared benefit of $5.2 million. More than three-quarters of the deliveries listing the supplier as Hole Europe Ltd, a London-based mostly device of Hole Inc.

The Russian customs documents are drawn from various professional vendors of trade facts and go via Sept. 30. They provide details of Russian imports from customs sorts, together with suppliers, importers, products descriptions and declared values.

The Gap shipments integrated anything from “knitted children’s socks” and “children’s pajamas” to “textile blouses for women of all ages” and “textile shorts for guys.”

Outfits, besides for luxurious items, frequently does not drop below the latest Western sanctions on Russia so as not to punish everyday citizens. But the write-up-March 10 shipments show up to contradict Gap’s declare to its personnel.

A Hole Inc spokesperson in San Francisco told Reuters in an e mail on Oct. 19 that “we stopped shipments to Russia as we declared in March and have not resumed.”

Reuters later on delivered Hole with Russian customs knowledge displaying the 1,585 shipments following March 10 to Gap Retail LLC, a Gap franchisee in Moscow. It is operated by Fiba Perakende Grubu, an Istanbul-based mostly retailer that runs all the Hole outlets in Russia, Turkey and Ukraine.

On Oct. 28, Gap acknowledged to Reuters that it experienced continued facilitating deliveries of garments to Russia until eventually April – a thirty day period immediately after it informed workforce it experienced suspended all deliveries.

“Because orders are made quite a few months in progress, our franchise spouse collected its final order from our distribution middle in April. Hole neither shipped nor sold any merchandise to our Russian franchise partner considering the fact that their final buy was processed,” the Gap spokesman said in reaction to queries posed by Reuters.

Hole didn’t answer to concerns about exactly when the orders have been placed, when they were being fulfilled or why it did not cancel fantastic orders right after its March 10 announcement.

Questioned why the apparel shipments to Russia continued until July, a Fiba Perakende supervisor stated in a assertion, “These shipments were delayed due to for a longer time transit instances by way of Turkey, as nicely as more managing time at Russian customs.”

But in accordance to the Russian customs records reviewed by Reuters, the huge the vast majority of the outfits shipments make no mention of Turkey as a transit level. Fiba did not reply to a query about the discrepancy.

‘SOME Merchandise ARE MISSING’

The Fiba Perakende assertion included that “due to Hole Inc’s choice to indefinitely suspend shipping of Hole goods to Russia, Fiba is in the procedure of winding down its Gap franchise organization in Russia, on depletion of any remaining on-hand stock in Russia.”

Along with its e-commerce site, gap.ru, Fiba Perakende said in its statement it experienced operated 23 retailers in 3 big Russian cities.

Gap Europe disclosed $9.6 million in once-a-year franchise revenue for Russia in its previous fiscal year, ending Jan. 30, 2021, down from $11.5 million the prior yr, in accordance to its once-a-year report and money statements. Hole Europe’s small business has been having difficulties, and it shut dozens of its enterprise-operated shops very last yr in the United Kingdom and Eire. A Gap Europe director did not react to a ask for for remark about the Russian shipments.

A girl who answered the phone this 7 days at a Hole keep in central Moscow reported it remained open up. Asked about its clothing assortment, she replied, “Yes, we have some choice. Of class, it relies upon what you are looking for. Some merchandise are missing.”

Russian customs documents demonstrate extra than 1,200 shipments of Gap garments to Russia concerning March 11 – the working day following Hole Inc’s announcement that it was halting shipments – and June 21. In every single circumstance, the provider was outlined as Gap Europe with the Netherlands as the departure country and Russia as the spot – with no mention of Turkey as a transit point. In its most the latest yearly report, Hole Europe mentioned it was modifying its distribution center for its franchise enterprise from the United Kingdom to the Netherlands.

Other shipments to Russia in June and July record the provider as either “Ankara customs” or another Istanbul firm that is connected to Fiba Perakende – suggesting the clothing might have passed by means of Turkey.

After July 16, the customs information demonstrate no shipments to Hole Retail in Moscow, indicating that the apparel move to Russia experienced stopped.

Gap’s March statement that it experienced suspended deliveries to Russia also stated it would donate $1 million value of apparel to Ukrainian refugees. In its newest statement to Reuters, Gap claimed, “We stand in solidarity with the people of Ukraine.”

Reporting by Siddharth Cavale in New York, Steve Stecklow in London and David Gauthier-Villars in Istanbul Enhancing by Vanessa O’Connell and Chris Sanders

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