One of Europe’s Largest Retailers, Still in Russia, Angers Its Ukraine Workers
PARIS — Shortly after a Russian rocket obliterated one of the largest shopping malls in Kyiv on Monday, Ukrainian employees of Leroy Merlin, a home improvement store that was destroyed in the blast, commandeered the company’s Ukraine Instagram page.
“Stop Sales in Russia,” they wrote, posting a picture of the shattered remains of the site, where a security guard for the company was killed, one of eight fatalities in the predawn strike.
Leroy Merlin shut its six stores in Ukraine after the war started, and paid employees the equivalent of three months’ salary. It has even helped workers and their families cross the border to Poland and Romania for safety.
But in Russia, the company operates 112 stores, and has given no public signs that it plans to leave. Just the opposite: It is working to expand its Russian inventory to adjust to sanctions and the departure of rival Western chains, according to an internal message provided by employees.
The Instagram message wasn’t the first time the Ukrainian workers had spoken out against Leroy Merlin’s insistence on doing business in Russia. Around 350 of them signed a petition last month asking the French parent company, Adeo Group, one of Europe’s largest retail conglomerates, to withdraw.
After employees sent executives the plea and posted messages on social media, Leroy Merlin shut down the Ukrainian unit’s internal Gmail accounts — blocking the ability to communicate with the home office and one another, according to interviews with two employees and posts by other Leroy Merlin workers on social media. Managers also asked Ukraine staff to remain politically neutral about company business, they said.
“Adeo told us that their biggest quality is their humanism,” said Anatoliy Zelinskyy, Leroy Merlin’s brand manager in Ukraine and an author of the message on the Instagram page. “But I never expected such a reaction from a business that claims humanitarian values.”
The list of global brands announcing their exit from Russia is growing by the day, adding pressure on the Russian economy and drawing threats from President Vladimir V. Putin to nationalize Western businesses that pull out.
But the Adeo Group is among a number of companies making a decision to stay.
Adeo is controlled by the Association Familiale Mulliez, a holding company and entrepreneurial empire run by France’s Mulliez family with an estimated fortune of 24 billion euros. It also owns the Auchan chain of giant supermarkets and Decathlon, a sporting goods retailer. For Leroy Merlin and Auchan, Russia is the second-largest market behind France. Altogether, they have over 400 stores in Russia, where they employ 75,000 workers and generated combined sales of over €8 billion last year.
The destruction of the Leroy Merlin in the Retroville mall in Kyiv opens a window onto the conflicting interests and thorny corporate and humanitarian calculations facing companies that have spent decades putting down stakes in Russia.
It has also turned an uncomfortable spotlight on France, where a host of blue-chip companies with big business in Russia have come under fire for being slow to withdraw. The companies may have partly been following advice: In closed-door meetings early in the conflict, French government officials urged top executives to avoid making hasty decisions to leave.
On Thursday, President Emmanuel Macron said during a news conference that French companies should be “free to decide for themselves” whether to stay in Russia.
President Volodymyr Zelensky of Ukraine took aim at those ties Wednesday during a video address to the French Senate, calling on Leroy Merlin, Auchan and the French carmaker Renault to halt business and to “stop being responsible for Russia’s war machine.” He added: “Everyone must remember that values are worth more than profits.”
Hours later, Renault announced that it would immediately suspend the activities of its Moscow factory and review its Russia business.
Adeo has not issued any statements on its activities in Russia since the conflict began. The company did not respond to email, text and telephone requests for comment for this article. Adeo’s LinkedIn page promotes solidarity with Ukraine, but after a barrage of online criticism over its unwillingness to leave Russia, comments were removed and disabled.
The company’s position remains a source of angst for a number of its Ukraine employees. They see humanitarian actions taken by Adeo since the conflict began, including providing donations and helping Ukrainian refugees flee Russian rockets, as being at odds with the decision to continue doing business in Russia.
After Mr. Zelensky’s speech, Adeo’s chief executive, Philippe Zimmermann, laid out the company’s thinking in a video address to employees, which was obtained by The New York Times.
“The war in Ukraine is dramatic, unbearable for both Ukrainians and Leroy Merlin in Ukraine. It affects us all,” Mr. Zimmermann said, acknowledging the concerns of Ukrainian employees and citing the bombing of the mall and the death of the contract security guard.
But he added: “There is no reason to condemn our Russian teams for a war they did not choose. There is no reason to turn away 45,000 employees representing more than 100,000 people with their families. There is no reason to stop being useful to Russians who need to repair, insulate, insure, protect and light their homes. We sell them essentials. It is our responsibility as employers and companies.”
The Russia-Ukraine War and the Global Economy
Rising concerns. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes and spooking investors. The conflict has already caused dizzying spikes in energy prices, and could severely affect various countries and industries.
The cost of energy. Oil prices already were the highest since 2014, and they have continued to rise since the invasion. Russia is the third-largest producer of oil, so more price increases are inevitable.
Gas supplies. Europe gets nearly 40 percent of its natural gas from Russia, and it is likely to be walloped with higher heating bills. Natural gas reserves are running low, and European leaders worry that Moscow could cut flows in response to the region’s support of Ukraine.
Food prices. Russia is the world’s largest supplier of wheat; together, it and Ukraine account for nearly a quarter of total global exports. Countries like Egypt, which relies heavily on Russian wheat imports, are already looking for alternative suppliers.
Shortages of essential metals. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.
Financial turmoil. Global banks are bracing for the effects of sanctions intended to restrict Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies crucial for trade. Banks are also on alert for retaliatory cyberattacks by Russia.
Leaving Russia would risk having the company’s assets nationalized, to the detriment of Russian employees, added Mr. Zimmerman, who echoed the message to employees in an interview published Wednesday in a French local newspaper, La Voix du Nord.
Workers in Ukraine say the two situations can’t be compared.
“They are talking about the well-being of Russian employees,” said Yevgeniy Kuzmin, digital director for Leroy Merlin in Ukraine. “But we are facing life and death in Ukraine — this is war,” he said by telephone from Lviv, an air raid siren blaring in the background.
In interviews, Ukraine employees acknowledged that Leroy Merlin had taken numerous steps to help deal with an unfolding humanitarian disaster when the Russian military invaded on Feb. 24. It authorized donations from its stores, including sand, wood and insulation, enabling Ukrainian soldiers to build bomb shelters and use sandbags to block Russian military vehicles. Some Leroy Merlin workers took up arms or joined Ukraine’s cyber army to combat the invasion.
Meanwhile, Mr. Kuzmin said, opposition was growing online.
“We started to receive a lot of hate messages from our customers on social media, saying, guys, you are an international company and you are also present in Russia. This means a great deal of finance goes to the Russian state budget, which helps to support war,” Mr. Kuzmin said.
Hundreds of the Ukraine employees signed the internal petition calling for Leroy Merlin to exit Russia and posted similar messages on the retailer’s Ukraine Facebook and Instagram pages. Managers pressured them to remove the messages, Mr. Zelinskyy and Mr. Kuzmin said.
Soon after, Leroy Merlin’s corporate communications channels in Ukraine were taken offline.
“Adeo explained that they were doing this due to the high risk of hacker attacks on our system and that it would be blocked temporarily,” said Mr. Zelinskyy, the communications manager. “But one month later, these still have not been put back online.”
Some employees were also angered by a leaked internal message, dated March 11, that showed that managers in Russia were trying to expand their selection of items as major competitors pulled out of the country and Western sanctions disrupted imports.
“After the departure of some companies, we are open to your suggestions to increase supplies and expand the product range,” said the message, which was sent to Russian suppliers and seen by The Times. “In the next three to four months, we plan to completely replace the imported assortment with goods produced in Russia.”
When the Russian rocket obliterated Leroy Merlin’s Kyiv store and killed the security guard — who had a wife and a child and had worked at the store as a sales associate for several years before switching jobs — Ukraine employees ramped up the visibility of their plea.
They tapped into Leroy Merlin’s Ukraine Instagram page and posted a link to an online public petition for the company to stop sales in Russia, which had gathered over 15,000 signatures by Wednesday evening. On Thursday, the page had been taken down.
“Every day, our directors would tell us that Adeo is human-centric, that humanity is at the heart of the company,” Mr. Kuzmin said. “But when it comes to war, where is the humanity? Only money matters.”
Adèle Cordonnier contributed reporting.
