Luxury Amid Sanctions: The Unyielding Allure of St. Petersburg's Grand Hotel Europe

Despite sanctions on luxury goods in Russia, LVMH's Grand Hotel Europe operates legally, serving sanctioned corporate clients. Ownership signs are removed, and bookings delisted, but the hotel generates significant profit. Retaining the property may signal LVMH's strategy to re-enter the Russian market eventually.

When conflict ignited in Ukraine in February 2022, LVMH swiftly closed its Russian luxury boutiques, even selling Sephora stores at a loss. However, its Grand Hotel Europe in St. Petersburg, owned through Belmond, continues operations legally, serving sanctioned Russian corporate clients.

Although ownership signs have been removed and it was de-listed on Belmond's booking site, the hotel's Russian, British, and French corporate records confirm LVMH's ownership. Its sanctioned clientele includes major Russian companies. Despite calls to close, executive decisions cite penalties for foreign asset sales in Russia and a city stake in the building.

LVMH may hold onto this asset, valuing its historical significance and potential profit. Despite sanctions, the hotel remains profitable, indicating LVMH's intention to maintain connections in Russia, leveraging the iconic landmark's prestige amid geopolitical complexities.

(With inputs from agencies.)