PARIS – French sports retail giant Decathlon has secretly continued selling clothes in Russia despite officially pulling out in protest at Russia’s war in Ukraine, according to a media report on Dec 19.

The multinational retailer, which posted sales of €15.4 billion (S$22.4 billion) in 2022, announced within weeks of Russia’s invasion of Ukraine that it would withdraw from the Russian market.

It noted in October 2023 that it had sold its 60 local Russian outlets to Desport, a move presented as marking the end of its Russian presence, according to the report on investigative media site Disclose. “Except it wasn’t,” the report added, noting that in recent weeks, “very discreetly”, Decathlon had continued to supply Desport with products carrying its flagship brands Quechua, Wedze and Kalenji.

Disclose, which cited internal documents, open-source videos and statements from former staff, said Decathlon had put in place “a vast system to conceal its exports as part of a supply agreement with Desport” that was worth at least US$12 million (S$16 million).

It added that the arrangement involved using a shell company in Dubai and a Singapore-based subsidiary.

Disclose said the operation took Decathlon “to the limits of legality”. It quoted an unnamed source who recently left the company as saying: “I learnt in the summer of 2023 that Decathlon wanted to continue selling its products in Russia. I immediately understood that it was a secret project.”

Decathlon diverted part of its production originally earmarked for European Union markets and boosted output at Asian production sites in order to meet Russian demand, the report said.

EU sanctions following Russia’s attack on Ukraine on Feb 24, 2022, made it illegal to deliver weapons, luxury goods or equipment to Russia that could strengthen its industrial capacity.

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Decathlon told the AFP news agency that it “operates no stores in the Russian Federation, employs no staff and owns no stakes in active companies in the country”.

It added that it was doing “everything to stop the resale on Russian Federation territory of products purchased in Europe by third parties”.

Decathlon responded to a query by The Straits Times on Dec 20, saying that it had made it a priority to ensure that staff employment was maintained with the new owner.

It said this was part of its disengagement from the Russian Federation, adding: “This is why Decathlon chose to transfer all of its operations and assets to ARM, the company that owns the Desport brand.

“To finalise the transaction, it was agreed, in accordance with local and international regulations, to supply a limited quantity of products for a limited period, to support the buyer in the launch of its new operations, thereby preserving the jobs of former teammates.” AFP

• Additional reporting by Colin Tan