‘Life doesn’t stop, it just changes’: Entrepreneurs flourish in Odesa

Dozens of women in fancy attire show up for a perfume launch in the center of Ukraine’s third-largest city. Alex Radyan picked Odesa to present two new fragrances with floral undertones named after a patriotic song, Chervona Kalyna.

“I know what it is to lose, and that gives me strength to start again,” says Mr. Radyan, CEO of Jan Niche Concept, which sold foreign perfumes before Russia waged full-scale war on Ukraine. The determination to save jobs in a teetering economy motivated Mr. Radyan to try his hand at local production.

He knows the risks. Russia’s shelling of the city of Kharkiv last March destroyed one of Mr. Radyan’s stores. The footage of shattered interiors on his phone serves as a vivid reminder of vulnerability. Shifting front lines are another danger. Previously, when Russia annexed territories in eastern Ukraine in 2014, he lost another store, one he dreams of reopening soon.

“It’s waiting for me,” he says with a smile, showing his confidence in the Ukrainian army.

Despite the fancy soirees like these – with drinks and appetizer trays fit for a Paris vernissage – sandbags still shield monuments and buildings across the city. Corkboards seal windows along the main boulevards. Antitank obstacles abound.

Dominique Soguel

The beaches of Odesa, once packed with tourists, stand empty on March 3, 2023. Swimming in the Black Sea was forbidden last summer due to concerns over sea mines.

But with winter and blackouts behind it and spring spreading warmth and optimism, Odesa’s business community is now abuzz with weekend product launches and networking events for those bold enough to stay and start new ventures.

“People feel a bit tired, but they are also optimistic,” says Olena Pidopryhora, co-leader of the Odesa branch of the Business Community Board, a national organization that has about 100 members in this port city dubbed the Pearl of the Black Sea. “They are trying to reshape their business, to reopen to find something new.”

“Our life doesn’t stop, it just changes”

It’s not an auspicious time to do business by any metric.

Russia’s war on Ukraine has forced thousands of businesses to close or relocate. Countless companies have been reduced to rubble by missiles and shelling. A February survey by the American Chamber of Commerce in Ukraine and McKinsey & Company found that 47% of companies experienced a decrease in sales greater than 30% due to the war, and 4% were forced to stop operations.

But that survey also found about 15% of businesses have grown in 2022 despite the challenges. Some large companies have shifted production lines to make war materiel, like drones. Among small and medium enterprises, the changes are more subtle. But even small tweaks mark an act of resistance, one rooted in a sense of duty and faith in a near-term victory over Russia by Ukrainian forces, as much as the imperative of making ends meet.

“Our life doesn’t stop, it just changes,” says Ms. Pidopryhora. Nearly 20% of Odesa’s businesses have relocated either to western Ukraine or Europe, while another 20% closed, she estimates. The remaining 60% survive in different forms, and some are even operating quite successfully.

One of those is run by Olena Palianychko, who learned the art of hat-making from her grandfather. The family business, which runs a workshop of 10 people and a shop in Odesa, shut down on Feb. 24, 2022, the first day of the war. But by March 8, with orders still coming in, they got back to work.

Dominique Soguel

Olena Palianychko poses in her hat shop in Odesa, Ukraine, March, 4, 2023. She learned the art of hat-making from her father.

“Last year was profitable,” she says. “We had a lot of orders before the new year. But the [winter] blackouts were very difficult. ... The flow of clients to the store dropped. When the lights came back [in January], people returned because they wanted something beautiful. Ukrainian women like to dress well even during the war.”

Sales have dropped, of course. The workshop made over 100 hats monthly prewar, compared with 30 now, but this did not stop her from seizing the chance to move her shop to a larger, two-floor building. She chips into the war effort by donating thousands of camouflage caps to the army.

Ms. Pidopryhora of the business club says social responsibility coupled with trust keeps Odesa afloat. When the war started, businesspeople proved their mettle by funding and structuring volunteer efforts ranging from making tank traps to running food kitchens.

“Businesses have to work, otherwise they die”

Then the focus shifted to adapting supply chains.

Six months into the war – once the shock lost its sting – Dmytro Rogachov weighed his options. Drawing on 17 years of experience in the logistics sector, he analyzed the market and crunched a half-year budget. He launched his company in December, and by February, he had secured enough profits from imports and exports to cover six months of operational costs.

“There is no reason to get depressed,” says Mr. Rogachov, noting logistics have become smoother with the increased use of river ports and land borders to Europe, since Russian warships halted regular traffic on the Black Sea. Ukraine is again sending apples to the Arab world and its supermarket shelves are full. “I believe in the power of Ukraine. I think we will win this war.”

Many in the city are banking on a bright summer. They count on a decent flow of short-term domestic – if not international – tourists. Construction workers embellish coastal night clubs expecting a return of business even if curfews have shifted the social clock forward and seagrass now grows on almost empty beaches.

“More and more venues will be open,” predicts Ivan Liptuga, president of the Odesa Tourism Association. “Small and medium businesses have to work, otherwise they die. We have a dilemma: What to do? Continue waiting for the victory and die of hunger? Or slowly start to recover your business to save jobs?”

Dominique Soguel

Oleh Ivanov, manager of 2.12, a cafe-by-morning and cocktail-bar-by-night joint in Odesa, poses at the bar on March 4, 2023.

The optimism is palpable at 2.12, a cafe-by-morning and cocktail-bar-by-night joint that opened in December. “Cocktail bars in Odesa are almost dead because of the curfews,” says Oleh Ivanov, the manager. “This is a hard time for our people, so we want to do something good. ... Our aim is to be an island of calm, positive pleasure.”

Last year was hard on the Ribas Hotel Group, but its CEO remains confident about the long-term future. Only 10 of its 26 hotels remain open now. The business model changed to cater for short-term rentals favored by displaced people and international organizations. That brought 20% of profits relative to 2021.

“The fact that we had profits is good already – we didn’t expect that,” says the group’s CEO and founder, Artur Lupashko. “You had two choices at the start of the war: leave or stay. Those who stayed had to move forward and do things. The sit-and-wait mentality is rare among businesspeople.”

Oleksandr Naselenko supported reporting for this story.