Domino’s franchisee considers withdrawal from Russia

Domino’s franchisee DP Eurasia finally considers withdrawal from Russia as western businesses continue to exit

  • DP Eurasia NV has revealed it is ‘evaluating’ its continued operations in Russia
  • ‘Work on a potential transaction is ongoing’, the group said today  

DP Eurasia NV  is ‘evaluating’ its continued operations in Russia, amid continued sanctions imposed on the country, with a possible sale of the unit on the cards. 

The group, which is the Netherlands-based independent franchisee of US firm Domino’s Pizza in Russia, Turkey, Azerbaijan and Georgia, is Russia’s third largest pizza delivery firm, with about 188 open outlets in the country.

Responding to recent media speculation, the group told investors on Wednesday it is ‘evaluating its presence in Russia, the impact of sanctions and its continuing ability to serve its customers in Russia’.

Mulling things over: DP Eurasia NV has revealed it is ‘evaluating’ its continued operations in Russia

DP Eurasia added: ‘Consequently, the Company is considering various options which may include a divestment of its Russian operations. 

 ‘Whilst work on a potential transaction is ongoing, there can be no certainty as to the outcome.’

DP Eurasia shares have fallen by around 40 per cent in the last year. 

While DP Eurasia did confirm that work on a potential transaction was ongoing, details remained sparse.

It said today: ‘A further announcement will be made as and when appropriate.’

In March, DP Eurasia suspended royalty payments from its restaurants in Russia and said it would limit further investment in the country following Moscow’s invasion of Ukraine.

Swathes of western brands pulled out of the country in the first half of this year, after Russian president Vladimir Putin sent troops and tanks into Ukraine. But, some have remained there.

This month, Mark Pritchard, MP for The Wreckin, named DP Eurasia, Unilever and HSBC as some of those companies continuing to trade with Russia.

Earlier this year, McDonald’s pulled out of the country over its invasion of Ukraine. In June, businessman Alexander Govor agreed to buy all 847 Russian McDonald’s outlets after the chain boycotted the country in early March.

He vowed to keep all their 62,000 employees on equivalent terms for at least two years.

Seattle-based Starbucks said it would exit Russia after nearly 15 years in late May. Starbucks had 130 stores in Russia, operated by its licensee Alshaya Group. 

In August, a new coffee chain took over Starbucks outlets in Russia. Stars Coffee is owned by a pro-Putin rapper, Timati, and a restaurateur, Anton Pinsky.

Back in July, Yum! Brands announced that it was one step closer to completely exiting the Russian market, after reaching what it described as the ‘advanced stages’ of transferring the ownership, operating system, and franchise rights of its KFC locations to a local company. 

Earlier this year, Yum! sold the franchise rights to its 50 Pizza Hut restaurants in the country to ‘a non-Yum! concept.’