By Tassilo Hummel, Gleb Stolyarov, Polina, Nikolskaya and David Gauthier-Villars
PARIS (Reuters) – Nike (NYSE:) stopped selling its sportswear to Russia shortly after Moscow launched its full-scale invasion of Ukraine more than two years ago. But that hasn't stopped footballstore.ru, an online sports retailer owned by Russian soccer club Zenit.
Among the dozens of Nike-branded items offered by the site are the American sportswear maker's Phantom GT2 Elite soccer boots, for 29,999 rubles, or about $330.
The man who brought these shoes to Russia is Wijnand Herinckx, a 40-year-old Dutch citizen living in Moscow. Since the conflict began, Herinckx has built a thriving business providing Russian consumers with Western products whose manufacturers have withdrawn from Russia.
“Nike does not want its products to be shipped to Russia,” Herinckx told Reuters in a video call from his office outside Moscow, where shelves are packed with boxes of shoes from Western brands. But he added: “They're not telling us not to do it either.”
Both Nike and Lego told Reuters they have not authorized Herinckx's imports of their products into Russia.
By examining customs data, corporate records and internal company documents, and speaking with Herinckx himself, Reuters discovered how his company sources brand-name products, including Nike and Lego: using middlemen with no apparent connection to Russia as buyers, then shipping the products to Russia. – often through Turkey – and finally delivers them to retailers in Russia.
There are at least dozens of companies like Herinckx that use gray market methods to bring Western goods into Russia, according to a Reuters analysis of customs data. Their operation shows how attempts by Western governments and brands to isolate the Russian economy are colliding with a global business reality: where there is demand, someone will satisfy it.
Restrictions by Western governments have focused primarily on industrial products that can be used to make weapons for the Russian war machine. These products are often subject to sanctions from the United States and the European Union. Herinckx said his focus is on consumer goods not covered by sanctions. Reuters found no evidence that her company was violating sanctions.
But companies like Herinckx's are indirectly helping the Russian economy: Consumers can still buy foreign products to which they have become accustomed since the collapse of communism more than a generation ago. Customs data analyzed by Reuters showed, for example, that the value of Nike products imported into Russia plummeted 81% in 2022 to $21 million, but recovered in 2023 to at least $74 million.
The sportswear giant said it did not supply Herinckx's company or any associated companies. “We no longer have Nike-owned physical or digital retail operations in Russia,” he said in a statement. “We do not ship any products to Russia, nor do we authorize any market partners to distribute products there.” He also said that he has a team dedicated to investigating unauthorized distribution channels. A spokesman did not respond to questions about how the products arrived in Russia.
In mid-2022, following Moscow's invasion of Ukraine, Nike announced it would exit Russia and Lego said it would close its Russian business.
While global brands stopped sales or exports due to the invasion, Russia authorized companies to import products from abroad without the permission of the brand owner. Russia said its so-called parallel imports amounted to more than $70 billion in the two years to the end of 2023.
Some legal specialists say seeking recourse under Russian law would be challenging for Western brands, leaving few legal options for brands trying to enforce intellectual property rights that are typically tied to the territory where the infringement took place.
The availability of Western brands allows Russian President Vladimir Putin “to project a message that war does not undermine the 'normal life' of the Russian middle class,” said Sergei Guriev, a Russian economist who is rector of Sciences Po University in Paris.
'PROUD OF IT'
Herinckx's Russian company employs 82 people and forecasts 2024 revenue of 35 million euros, or about $37 million, he said. Last year, it was $23.7 million, according to company accounts.
At the time of the Russian invasion of Ukraine in 2022, Herinckx was working in the Moscow office of a German company, Hellmann Worldwide Logistics. According to Herinckx, he led a team of more than 20 people within Hellmann that served foreign companies that wanted to sell in Russia without establishing local operations.
Hellmann quickly decided to withdraw from Russia. Herinckx stood still. He had previously married a Russian woman with whom he had had children, Herinckx said. “Our life is here. Everything we have we build here,” he said.
He took over one of Hellmann's Russian entities, renamed it Herinckx Trade Solutions Rus (HTS Rus) and registered it in his wife's name in April 2022. Herinckx initially used Hellmann's email servers and a variation of the logo of Hellmann in their marketing.
Both Herinckx and Hellmann said they had a transitional agreement to allow the Dutchman to use some of his former employer's infrastructure. Hellmann said the agreement to use his logo expired in October 2022 and that his intellectual property was used without his consent after that. Herinckx said this was an oversight and stopped using Hellmann's logos in January 2024. Hellmann said he now has no connection to Herinckx's business and has no operating businesses in Russia.
Among the products the Herinckx company ships to Russia are Reebok sneakers and Emporio Armani wristwatches, according to Herinckx and data recorded by a Russian bank that lists assets HTS Rus pledged against a loan.
Herinckx said he did not have authorization for those two brands. Armani Group said it had stopped authorized shipments to Russian distributors and does not know how HTS Rus got hold of the products. Reebok owner Authentic Brands Group, which said in 2022 it had suspended all brand stores and e-commerce operations in Russia, did not respond to a request for comment.
The Dutchman's company does not make its clients public. But Reuters identified some of its Russian clients by reviewing documents the company filed with Russian tax authorities. Its clients included some of Russia's largest supermarket chains and online retailers.
Herinckx said his company is a good corporate citizen that also participates in charity work. When asked why he decided to speak publicly about his operations, he said: “What we do is great, we are proud of it.”
EUROPEAN ROUTE
Among its achievements is the importation of Lego bricks. The Danish firm said it strictly enforces its policy of not selling to Russia. When you sell to retailers or distributors, you write in the contract that they must not resell to Russia, according to Herinckx and Lego.
To solve this, Herinckx said he inserted a chain of intermediaries between Lego and Russia. Some of the Lego bricks she buys are first purchased from the manufacturer by a company in Europe that has no connection with her business, she said, avoiding naming the company. It then buys the bricks from that company, using a Dutch-registered entity it owns called HTS Europe BV, he said.
The goods are then transported directly by truck from Europe to Russia, passing through customs checks along the way, according to Herinckx.
Once in Russia, Lego falls under the control of Herinckx's Russian company, HTS Rus, according to loan details and tax documents. Herinckx told Reuters he supplied Lego to about 48 Russian companies, mostly specialist toy retailers.
“My kids play with Lego,” Herinckx said. “I have nothing against other children playing with Lego.”
However, Lego has problems with its operation.
After Reuters contacted Lego for comment in late April, the Danish company said it had written to HTS Rus accusing it of falsely claiming on its website that it collaborated with Lego. HTS Rus subsequently changed the English version of its website, removing an image of Lego figures and replacing it with generic plastic children's toys. The Russian version of the site still carried the Lego logo as of June 13.
“We are concerned to learn of this flow of goods considering we stopped shipping LEGO products to Russia in March 2022,” Lego said in a statement to Reuters. “This is an issue we take seriously and are acting on, while ensuring we comply with local laws and regulations where we continue to operate.”
TRANSPORTED THROUGH Türkiye
Some Western products arrive through Turkey, a favored hub for gray market imports to Russia. Herinckx said he sources Nike and some Lego products in Turkey, through a company called HTS Poer Dis Ticaret Limited Sirketi, which he said sources products from Turkish retailers or distributors. He declined to name them.
HTS Poer co-founder Murat Erbelger told Reuters the Turkish company had nothing to do with the sanctioned products. “We do legitimate business,” he said. Erbelger did not respond to questions about HTS Poer's partnership with Herinckx Trade Solutions. When asked by Reuters about gray market products arriving in Russia through Turkey, the Turkish presidency's communications directorate did not respond.
Customs data for the period from June 2022 to December 2023 showed that HTS Poer supplied at least $4 million worth of Nike products to Russia. Herinckx told Reuters that, as far as he knew, all of those shipments of Nike products were destined for his company.
Once Nike products arrive in Russia, they go to Herinckx's retail customers. Among them is footballstore.ru, according to tax records and the internal document of HTS Rus. Russian corporate records show the retail site is 100% owned by football club Zenit.
The Zenit club is sponsored by Gazprom (MCX:), the Russian state gas company, and is also partially owned by Gazprombank. The lender is subject to US sanctions on the Russian banking sector. Gazprombank, Gazprom and Zenit did not respond to requests for comment.
Reuters bought the Nike Phantom GT2 Elite football boots from the online retailer. They were delivered 10 days later. Nike had no comment on the shoes.
The shoe box listed a manufacturing date of September 2022, three months after Nike said it stopped selling in Russia. It also bore a label identifying Herinckx's HTS Rus as the importer.
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