Economic|The Russian attack
The fast food chain, which has been operating in Russia for more than 30 years, plans to sell all its operations to a local company due to its changed operating environment.
International fast food chain McDonald’s announced on Monday that it would leave the Russian market permanently due to the war in Ukraine.
The company suspended its restaurants in the area as early as March. Now the company is looking to sell all its restaurants and other parts of the business to a Russian company. The new buyer is not yet known.
Restaurants that become available under the arrangement will no longer be allowed to carry the McDonald’s name or anything associated with it.
Company began operations in Moscow in 1990 and has since spread across the country to more than 800 units. All restaurants were closed for 90 days as early as 2014 with the conquest of Crimea by Russia. Now the company says it will sell its restaurant due to the humanitarian crisis caused by the war in Ukraine and the unpredictable operating environment.
At the same time, one era is coming to an end. The burger chain came to the then Soviet Union with great expectations. At the end of January 1990, thousands of Muscovites were queuing for hours at the first restaurant for burgers.
The restaurant was expected to be the busiest McDonald’s restaurant in the world. It had 700 customer seats indoors and 200 outdoors in the summer.
According to HS at the time, the opening of the restaurant was preceded by 14 years of negotiations.
“We’re interested in everything American,” the local Lena Kalashova said on the opening day The Washington Postille.
“We came here because we thought this would be an unforgettable experience.”
Now unforgettable experiences are over. At the same time, there is growing uncertainty about the work of tens of thousands.
Prior to the March closure, McDonald’s employed about 62,000 people in Russia. Operations in the region generated nine percent of the company’s total revenue and three percent of total operating profit.
The company says it will do its best to take the old employees under its control. The chain’s restaurants have also been closed during the crisis in Ukraine, where employees have been paid full pay.
The company estimates the withdrawal will cost about $ 1.2-1.4 billion. The money is spent on the sale of investments and losses due to foreign currency translation, which were previously included in shareholders’ equity.
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