Thirty-two years ago, the light of the Golden Arches pierced the veil of the Iron Curtain when McDonald's (NYSE: MCD) first opened in Moscow's Pushkin Square in 1990. That light got a little dimmer Monday when workers took down another pair of arches at a McDonald's in nearby Khimki, just outside Moscow.
Moments like these are set to repeat themselves across the Federation after last Monday, when the burger giant announced plans to "de-arch" its 800 Russian locations, stripping them of McDonald's branding, logos, and menu items and selling them to a local buyer, Alexander Govor.
"The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald's to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald's values," said the company in a statement.
All in all, McDonald's Russian operations once accounted for 2% of the company's global footprint, with 85% of its Russian locations being corporate-owned.
The company expects to write off some $1.2 to $1.4 billion in "foreign currency transaction losses" due to the sale. Under the terms of the deal, Grovor will operate McDonald's former locations across Russia under a new brand. He also agreed to continue paying staff salaries at corporate locations until the sale closes.
McDonald's currently employs some 62,000 across Russia.
"Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens is surely the right thing to do," wrote McDonald's CEO Chris Kempczinski in a memo to franchisees obtained by the New York Times. "But...it is impossible to imagine the Golden Arches representing the same hope and promise that led us to enter the Russian market 32 years ago."
McDonald's has also closed its locations in Ukraine while Russian aggression remains ongoing, with lost sales in both locales costing the company 13 cents a share in the first quarter.
Mcdonald's and the Corporate West were largely silent when Russian bombs began to fall in February, but the chain halted operations in March as the depths of Putin's war crimes became clear. A litany of other brands followed suit simultaneously, such as Burger King (NYSE: QSR) and Yum Brands (NYSE: YUM), owner of KFC and Pizza Hut.
The future of these and other brands in Russia remains unclear. However, on Monday, Starbucks (NASDAQ: SBUX) announced that it "would no longer have a brand presence" in Russia.
It seems that the Golden Arches won't be the only emblem of American soft power soon to disappear from Russian streets.