By Pam Martens and Russ Martens: March 14, 2022 ~
Nike can’t seem to take its own advice and “just do it.”
On March 3 Reuters and the Wall Street Journal reported that Nike was temporarily closing its more than 100 stores in Russia. The Wall Street Journal carried this statement from Nike:
“We are deeply troubled by the devastating crisis in Ukraine and our thoughts are with all those impacted, including our employees, partners and their families in the region.”
This sounds like something one might say following an act of nature – like a hurricane or a flood. It doesn’t sound appropriate for a barbaric bombing attack by Russian President Vladimir Putin on hospitals, schools and apartment buildings in Ukraine that had left hundreds of civilians dead at that point.
The day after Nike’s statement to the press, we could find no official statement on Nike’s website to indicate that it was closing its stores. What we found instead on its Russian webpage was a listing of more than 100 stores in various cities in Russia. Some carried the notice “Temporarily closed,” but many others indicated that they were open.
We emailed the Media Relations folks at Nike on March 4, asking them “What is the time frame for closing Nike retail stores in Russia?” We told them our deadline was 7 p.m. ET that evening. We received no response whatsoever.
Yesterday, Sunday, March 13 – 10 days after Nike first made its announcement of closing stores – we checked the same website page for Nike stores in Russia. This time, it showed 93 stores open throughout Russia. Only the Nike outlet stores stated: “Closed for the next 7 days.”
Reuters apparently shared our same suspicions about Nike. Reuters reported on March 11 that it had found six Nike stores open in Russia. Nike’s story this time around to Reuters was that these open stores were “operated by independent partners.”
We searched Nike’s various websites as well as its filings in March with the Securities and Exchange Commission. The only official statement we could find related to shuttering operations in Russia was this:
“Currently, Nike cannot guarantee the delivery of goods to customers in Russia. As a result, the purchase of products on the Nike.com website and the Nike app is temporarily unavailable in this region.”
Again, no condemnation of Russia’s invasion and brutal war against its neighboring country of 44 million people.
Nike has about half as many stores in Russia as it has in the United States, its home country. It has also been heavily involved in sports in Russia. In 2013, it announced this:
“In partnership with the Ice Hockey Federation of Russia, Nike introduced the Russian Ice Hockey National Team jersey with help from Alexander Ovechkin, of the Men’s Russian National Ice Hockey Team and Alexandra Kapustina, of the Women’s Russian National Ice Hockey Team.”
In 2012, Nike announced its new design for the Spartak football club in Russia.
In 2018, Nike announced the opening of a sprawling sports complex in Gorky Park carrying its logo.
Nike is far from the only famous western brand that doesn’t seem to understand that the purpose of the European Commission, the U.S., U.K., Canada and their allies imposing stiff economic sanctions on Russia is to force Putin to stop his bloody, deadly and illegal campaign of war crimes against his neighboring country – which posed no threat to Russia. Ukraine has no nuclear weapons. Russia has 5,977 nuclear warheads.
In a similar tone-deaf move, the fast-food chain, McDonald’s, released a statement on March 8 indicating that it was “temporarily” closing all of its restaurants in Russia but that it was going to continue to pay its 62,000 Russian workers.
How is a paid vacation a sanction? To most rational people it sounds like a perk.
Citigroup, JPMorgan Chase and Goldman Sachs also continue to serve clients in Russia while making ambiguous statements to the press to suggest they are unwinding operations, as we reported on Friday.
In other important news related to Russia and/or the markets:
The Moscow Stock Exchange has announced that it will remain closed to stock trading this week for the third straight week in a row. If it opened, the Russian people would quickly see that many of the large Russian corporations that trade there have lost almost all of their value as a result of Putin’s barbaric actions in Ukraine and the related collapse of the country’s currency, the Ruble – which now trades for less than one penny to the U.S. Dollar.
On Tuesday and Wednesday of this week, the Federal Reserve will hold its Federal Open Market Committee (FOMC) meeting and announce its interest rate decision at 2:00 p.m. on Wednesday. It is widely assumed that the Fed will boost its benchmark rate by ¼ of one percent (25 basis points). That will be the first time that the Fed has raised its benchmark rate since December 20, 2018. The Fed has been at the zero-bound range (0 – 0.25 percent range) since March 16, 2020.
Also on Wednesday, Russia has a $117 million interest payment coming due on its sovereign debt. Fitch Ratings, which along with S&P and Moody’s has a junk rating on the debt as a result of the Ukraine invasion, has described the risk of a Russian default on its debt as “imminent.” An actual default by Russia could rock the prices of Russian corporate debt as well as junk bonds in general.
The announcement from the Fed on Wednesday will be followed by an interest rate announcement on Thursday from the Bank of England (BOE). It’s expected that the BOE will also hike rates by 25 basis points, bringing its benchmark rate to 0.75 percent in an effort to deal with surging inflation on that side of the pond.
When the markets open in New York this morning, all eyes will be on JPMorgan Chase. It lost 2.25 percent on Friday, almost three times the amount of its peer banks on Wall Street, after Bloomberg News reported that it was the largest counterparty to an insanely large short position in nickel made by Chinese tycoon Xiang Guangda and his metals company, Tsingshan Holding Group. Bloomberg reported that JPMorgan Chase is on the hook for approximately $1 billion in margin calls. The situation led to the London Metal Exchange halting trading in nickel since last Tuesday. This is all very reminiscent of the Archegos fiasco of last March and just one more indication that federal regulators have failed to rein in the risks posed by the megabanks on Wall Street – and JPMorgan Chase in particular.