Inventory of Turkish fashion retailer Koton (KOTON) held at fulfillment centres belonging to Russian ecommerce giant Wildberries has been damaged by Ukrainian drone attacks, Koton said on July 20.

The apparel group said the damaged stocks at two major Wildberries logistics facilities was equivalent to 0.4% of its total assets as of end-Q1.

The logistics hubs operated by Russia’s leading ecommerce platform, owned by Ozon (Moscow/OZON), were struck during aerial attacks on July 17.

Koton said the incident would not exert a material impact on its financial position, ongoing operations or business continuity.

Wildberries is currently conducting comprehensive damage assessment procedures at the affected sites and it has pledged support measures for impacted vendor partners. Koton noted that it is actively pursuing indemnity claims under its existing property and cargo insurance policies, working in close coordination with local and regional insurance brokers to recover losses.

Exodus of Western brands

Following the exodus of Western retailers from Russia in the wake of the Kremlin's February 2022 full-scale invasion of Ukraine, Turkish apparel chains stepped in aggressively to expand into vacated commercial spaces and digital marketplaces across Russia.

Wildberries serves as the central digital distribution backbone for foreign apparel and consumer goods imported into Russia, making it a critical sales channel for Turkish brands navigating Russian consumer demand.

In April, Koton ended store operations by closing its two locations in Ukraine and decided to continue operations in the country via online channels.

War in the north, war in the south

Koton has also been expanding into the Gulf Cooperation Council (GCC) region, which is imperilled by the continuing Iran War. On July 16, the company said that it launched a third store in Oman in addition to a fourth store in Qatar.

The company also operates stores in Saudi Arabia, the UAE and Bahrain.

So far, the company’s GCC stores remain unaffected by the conflict.

In March, the company launched its seventh franchise store in Azerbaijan. In December, it opened its sixth store in Hungary.

As of end-March, Koton operated 464 stores, including 226 franchise stores. A total of 226 stores were abroad, including 76 franchise stores.

Koton, launched in 1988, opened its first stores in the Middle East, Russia and Balkans in 2002.