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31 Oct 2022

Siddharth Cavale,
Steve Stecklow,
David Gauthier-Villars, Reuters

Russia: GAP says deliveries stopped in March, but Reuters investigation shows clothing kept coming until July; incl. co. comments

GAP shop

EXCLUSIVE Gap says Russia deliveries stopped in March. But its clothing kept coming, 31 October 2022

In March, clothing retailer Gap Inc joined numerous Western companies in announcing that it was halting deliveries to Russia to protest its invasion of Ukraine...

But Russian customs records reviewed by Reuters show that between March 11 and July 16, Gap's franchisee in Moscow received 1,585 clothing shipments with a declared value of $5.2 million. More than three-quarters of the deliveries list the supplier as Gap Europe Ltd, a London-based unit of Gap Inc.

The Russian customs records are drawn from several commercial providers of trade data and go through Sept. 30. They provide details of Russian imports from customs forms, including suppliers, importers, product descriptions and declared values.

The Gap shipments included everything from "knitted children’s socks" and "children’s pajamas" to "textile blouses for women" and "textile shorts for men"...

A Gap Inc spokesperson in San Francisco told Reuters in an email on Oct. 19 that “we stopped shipments to Russia as we announced in March and have not resumed.”

Reuters later provided Gap with Russian customs data showing the 1,585 shipments after March 10 to Gap Retail LLC, a Gap franchisee in Moscow. It is operated by Fiba Perakende Grubu, an Istanbul-based retailer that runs all the Gap stores in Russia, Turkey and Ukraine.

On Oct. 28, Gap acknowledged to Reuters that it had continued facilitating deliveries of clothes to Russia until April – a month after it told employees it had suspended all deliveries.

“Because orders are made many months in advance, our franchise partner collected its final order from our distribution center in April. Gap neither shipped nor sold any merchandise to our Russian franchise partner since their final order was processed,” the Gap spokesman said in response to questions posed by Reuters.

Gap didn’t respond to questions about exactly when the orders were placed, when they were fulfilled or why it didn’t cancel outstanding orders after its March 10 announcement.

Asked why the clothing shipments to Russia continued until July, a Fiba Perakende manager said in a statement, “These shipments were delayed due to longer transit times via Turkey, as well as additional handling time at Russian customs.”

But according to the Russian customs records reviewed by Reuters, the vast majority of the clothing shipments make no mention of Turkey as a transit point. Fiba didn’t respond to a question about the discrepancy...