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Vladimir Putin has ordered Russia’s government to help rebuild warehouses destroyed in a series of Ukrainian drone attacks this summer that have devastated Wildberries, the country’s largest online retailer.
Russia’s president told officials on Wednesday that the country’s logistics and storage capacity “need to be rebuilt, including with government support”.
The attacks have partly or completely destroyed seven of Wildberries’ ten largest facilities. But Putin claimed Russia’s retail infrastructure was “efficient and resilient [ . . . ] and entirely coping with the challenges of our time”.
He also shrugged off the broader impact of Ukraine’s largely homegrown advances in drone technology, which have brought the war home to Russia this spring and summer in an escalating series of attacks.
Ukraine’s strikes on Russian refineries have forced one of the world’s largest energy exporters to import petrol and introduce rationing at the pump in its largest fuel crisis since the collapse of the Soviet Union. Drone attacks on Russia’s Black Sea ports have also paralysed its grain exports and cut off one of the main avenues for its oil sales.
Putin admitted that the drone attacks and western sanctions were holding back Russia’s GDP growth, which rose by just 0.6 per cent in the first half of this year.
He added that “there have not and cannot be any critical consequences from these attacks” in his remarks on Wednesday. “But, of course, they are doing harm to us, that’s obvious.”
The announcement offers a potential lifeline to Wildberries, the ailing ecommerce retailer whose business has become a major target of Ukraine’s drone campaign.
The attacks have killed at least 10 people and left the company facing losses Russian analysts have put as high as Rbs878bn ($10bn) in destroyed inventory and facilities.
Ukraine has justified the attacks on the basis that Wildberries sells drone components and other dual-use equipment for Russia’s military.
Denys Shtilerman, co-founder of FirePoint, the defence manufacturer whose drones have been heavily used in the strikes, has said Ukraine hopes the losses will trigger a broader economic crisis by forcing Wildberries to default on its debt to state banks including VTB, its main partner.
The total bill for Wildberries’ rescue could stretch as high as Rbs1.3tn ($15bn) in new debt financing, while the company’s turnover has fallen by 25 per cent after the small businesses that make up the bulk of its sellers lost their inventory or left the platform, according to independent Russian news site The Bell.
Putin did not say how much Russia would spend on bailing out Wildberries or mention the company by name but promised that the destroyed warehouses would be rebuilt at a “qualitatively new technological level”. He suggested the support could include tax breaks and subsidised loans.
The central bank has already instructed banks to restructure Wildberries sellers’ debt on favourable terms, while the company itself has pledged some financial support to the most affected.
Russia has also inflicted growing damage on Ukraine’s cities in recent weeks through a stepped-up campaign of missile and drone strikes.
Ukraine’s air defences are powerless to stop the ballistic missile strikes after running out of interceptors for US-made Patriot launch batteries, the only technology capable of shooting them down.
