On March 23, a Russian government commission on economic policy officially added Sportmaster to the list of the companies essential to the national economy. Sportmaster became the first sporting goods retailer in the country ever granted this status, which could help it to better navigate through the current coronavirus epidemic.
Russian government agencies were scheduled to begin stress tests for the companies recognized as essential on March 30. Those passing the test would be eligible for some additional state aid. Vasily Markov, a partner in an international legal firm, Dentons, explained that with that status the company can get access to soft loans from he state-owned Russian banks.Some companies could also file for the postponement of interest payments on loans contracted with Russian banks and seek specific subsidies from the government.
Because of the Covid-19 epidemic, which has not spared the country, the Russian government has ordered a lockdown of non-essential brick-and-mortar retail operations until April 30, leaving it up to the provincial governments to make exceptions. Sportmaster and other sporting goods retailers are abiding by the relevant decisions of the regional authorities.
They are ramping up their online sales operations, but the demand for most items has slumped. People are not allowed to go outside, so there is no sense for them to purchase bicycles, tents and there is really not much use to buy more sports clothing or athletic footwear, says another major Russian sports retailer, Kant, predicting that the country’s sporting goods market could shrink by 50 percent in the foreseeable future.
So far, the government has not embarked on any supportive measures for the Russian sporting goods industry, although some discussions are taking place. On March 20, the government adopted a broad package of measures aimed at supporting Russian companies, which includes a moratorium on all inspections by the Federal Tax Service and tax holidays for a wide range of companies.
