Koton inventory hit by Ukraine strikes on Russian hubs
Turkish retailer Koton is pursuing insurance claims after Ukrainian strikes destroyed inventory at Russian warehouses, highlighting the supply chain risks of its aggressive expansion into conflict-adjacent markets.
Turkish apparel retailer Koton disclosed on July 20 that Ukrainian drone strikes on Russian logistics hubs destroyed a portion of its inventory. The attacks on July 17 targeted two major fulfillment centers operated by Wildberries, Russia's dominant ecommerce platform. Koton is now pursuing indemnity claims through its property and cargo insurance policies.
The financial damage is tightly contained. Koton valued the lost inventory at just 0.4% of its total assets as of the end of the first quarter, noting the incident will not materially affect its financial position or business continuity. Wildberries is still conducting comprehensive damage assessments and has pledged support measures for impacted vendors.
The presence of Koton’s goods in a Russian logistics network underscores the strategic gamble Turkish retailers have taken since 2022. Following the mass exodus of Western brands after the Kremlin's full-scale invasion of Ukraine, Turkish chains moved aggressively to occupy vacated commercial spaces and digital marketplaces. Wildberries, owned by Ozon, has become the essential digital distribution backbone for foreign apparel brands navigating Russian consumer demand.
Koton has simultaneously navigated active conflict zones to its west and south. In April, the company shuttered its two physical stores in Ukraine, opting to serve the market strictly through online channels. It also operates locations in Azerbaijan, where it opened its seventh franchise store in March, and Hungary, where a sixth location launched in December.
The company continues to push into the Gulf Cooperation Council region despite the escalating Iran War. On July 16, Koton opened its third store in Oman and its fourth in Qatar, supplementing existing locations in Saudi Arabia, the UAE, and Bahrain. Management noted that its GCC stores remain unaffected by the regional conflict so far.
This rapid international expansion now represents half of Koton's physical store count. As of late March, the retailer operated 464 locations globally, with 226 of them located abroad, including 76 franchise units. While the Wildberries strike proved financially negligible, Koton’s sustained expansion into Russia and the Middle East exposes the company to persistent geopolitical and supply chain vulnerabilities.
