Burberry extends its Moscow office lease until 2027
The British fashion house Burberry, which closed its stores in Russia, has extended the lease on its office in the centre of Moscow. This transpires from the notes to its Russian subsidiary's 2023 and 2024 financial statements, RBC reports.
The office is located at 16 Petrovka Street, and the documents show that initially the company's agreement with the property owner was to run until the end of August 2025, but it was later extended until March 2027. The office floor space remained the same over the year, at 153 square metres.
Burberry temporarily closed three of its boutiques in Russia in March 2022, as did other luxury brands such as Louis Vuitton, Hermès, Chanel and Prada. The Guardian reported that Burberry was one of the last to do so. Its stores in Crocus City Mall (Krasnogorsk) and the Vremena Goda shopping centre on Kutuzovsky Prospect finally closed in 2022 and 2023, respectively, and its flagship boutique in GUM on Red Square finally closed its doors in 2024. Burberry did not renew the expired lease agreements for the store premises.
Lease agreements are mostly renewed for those locations that are strategically important for the brand, be it an office or a flagship store, said Evgeny Domashenko, director of the tenant representation division of CORE.XP real estate agency. If the outlet is not so significant, and the lease terms allow the tenant to exit without serious financial losses, it is terminated early, RBC quotes him as saying.
According to Maria Zimina, partner and director of NF Group's commercial property department, if the office floor space is small, as Burberry's is, the maintenance costs do not have a significant impact on the overall budget. In this situation, it is easier and more cost effective to keep the space and extend the lease than to look for new premises when returning to the market, she believes. This allows the brand to maintain a symbolic presence and keep the door ajar to the Russian market, she said.
Luxury brands do not often renew their lease agreements. Dior gave up five stores last year, and now the French fashion house has just four boutiques in Russia. Italy's Prada Group closed all its units in TSUM and did not renew the lease on the store selling its Miu Miu brand in Stoleshnikov Pereulok. The French house Hermès also completely left the Vremena Goda shopping centre, as well as the business centre in Nizhny Kiselny pereulok.