Lego ceases Russian sales, ends contract with store operator

MOSCOW (BLOOMBERG) - Lego Group, the world's largest toymaker, is stopping sales in Russia and has terminated its contract with the operator of 81 of its stores in the country.

Lego has decided to "indefinitely cease commercial operations in Russia", the company said in an e-mail. That includes firing most of its Moscow-based employees and ending its partnership with Inventive Retail Group, which owned and operated the stores on Lego's behalf.

Lego already in March stopped shipments of products after Russia invaded Ukraine. But the Danish toymaker may not be able to keep its products out of the country.

Besides cheap credit and subsidies for struggling industries, the Russian government has also responded to sanctions by cancelling customs duties on numerous products and legalising grey market sales, also known as parallel imports.

According to a July 11 statement on its website, Russia's Trade Ministry approved changes to the list of products for parallel import that "mainly" affect "products of Siemens, BMW and LEGO brands, which previously announced their complete exit from the Russian market".