Auchan are among the French companies criticized for their ongoing Russian business. /VCG

Auchan, Leroy Merlin, and Yves Rocher are among the French companies facing pressure to abandon operations in Russia.

Since widespread sanctions against Russia were introduced in early March, a number of western brands – from Ikea to McDonald's – have decided to end or suspend their operations there.

When addressing a joint session of France's two houses of parliament on March 23, Ukrainian President Volodymyr Zelenskyy named the French firms still operating in Russia and asked MPs to intervene.

"Renault, Auchan, Leroy Merlin and others. They must cease to be sponsors of Russia's military machine, sponsors of the killing of children and women, sponsors of rape, robbery and looting by the Russian army," he told legislators.

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Backlash

Auchan and Leroy Merlin are both assets of the Mulliez family, which has ownership in a number of prominent French firms with operations in Russia. They also own sporting goods retailer Decathlon, which only announced it was suspending activity there on Tuesday.

Facing a backlash for having made no plans to exit Russia, Auchan's CEO Yves Claude told a French newspaper on Sunday "it would be unimaginable to leave the country from a human point of view."

A statement from the company later clarified that it stood with Ukraine's President and wanted to see an end to the fighting, but could not sensibly end its Russian business operations.

"Closing our activities in Russia would be considered as a premeditated bankruptcy leading to an expropriation that would strengthen the Russian economic and financial ecosystem, would put our employees and their families in great precariousness and would deprive, in a period of high inflation, the population of the services of a discounter distributor, which has been operating in the country for 20 years," part of the statement read.

Public Relations

Many market analysts agreed that an exit is good for public relations in the short term – but may not do much to hurt the Russian economy in the long term.

"If foreign investors suddenly decide to leave the country and stop their operations, it would be considered a fraudulent bankruptcy," said financial strategist and consultant Michel Noiry.

"The company and all their assets in the country could be nationalized and then they would probably be sold to other companies and this would create an income for the Russian state which could help it in its war effort," he continued.

Any exit from the Russian market will be complicated for France's financial system.

Billions of dollars are likely to be unrecoverable and unraveling the financial ties will take years.

President Emmanuel Macron has warned that sanctions against Russia will hurt French citizens and businesses too.

Additionally, 30 of France's top 40 blue-chip companies listed on the CAC40 index have investments there.