ECONOMYNEXT – Decathlon, a sportswear brand based in France, said it was ending its stories in Sri Lanka after an import ban imposed amid a currency crisis made it impossible for the company to operate in the country.
“Decathlon will indefinitely suspend all retail operations in Sri Lanka (store and e-commerce) from October 30, 2022, the company said in a statement.
“Due to the current situation in the country, it has become impossible for us to restock our product lines.”
The company hopes to continue its production activities on the island.
“We sincerely hope to restart our retail operations in Sri Lanka when circumstances permit,” the company said.
“DECATHLON’s production activities in Sri Lanka will continue to operate as normal.”
Decathlon had operated a retail store in Battaramulla, Sri Lanka since 2018, while operating an e-commerce website. Another store in Union Place was closed on July 31, 2022, the company said.
The France-based company is currently present in 60 countries with 1,747 stores.
Sri Lanka imposed an import ban on more than 300 items in August, amid the worst currency crisis unleashed in the history of the island’s loosely pegged central bank.
Currency shortages are a problem associated with soft peg regimes, and are absent from clean floats and hard pegs and are related to money and credit.
Import bans have no effect as long as credit triggered by printed money continues.
The latest import ban, however, came amid a sharp correction in the balance of payments after the central bank allowed a rate hike, reducing credit and private investment.
Prohibited items include dairy products, cosmetics, electrical appliances, personal watercraft, ships, airplanes, electrical and electronic appliances, and building materials.
Some industrial machinery, including metalworking machinery, packaging machinery and ball bearings, was also shut down. Many small and medium-sized enterprises said they were facing difficulties.
(Colombo/ Sep 10, 2022)