Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
A logo of Zara is seen at the entrance of a store in Brussels, Belgium. Picture: YVES HERMAN/ REUTERS
Spanish fashion retailer Inditex has halted trading in Russia, closing its 502 shops and stopping online sales, the company said n Saturday.
The Zara owner is following some of the biggest Western brands which have suspended operations in Russia, including its main rival, H&M, following the invasion of Ukraine and the imposition of economic sanctions.
“In the current circumstances Inditex cannot guarantee the continuity of the operations and commercial conditions in the Russian Federation and temporarily suspends its activity,” the world’s biggest fashion company said.
Russia accounts for about 8.5% of the group’s global earnings before interest and tax, and all the Inditex stores operate on a rental basis, Inditex said. “The investment is not relevant from a financial point of view.”
Inditex said it would give its workforce of more than 9,000 people a special support plan, without giving any details. The group’s 79 stores in Ukraine have already been temporarily closed.
Spain’s second-largest fashion retailer, Mango, said on Thursday that it has temporarily closed its 120 Russian shops. Tendam, the third-largest clothing group, said it took a similar decision on Saturday.
“The combination of the weakness in the rouble, resulting in large price increases for the Russian consumer, and increased logistical difficulties will make operations difficult for all retailers importing into Russia, even if there are no direct sanctions on their product categories,” said Adam Cochrane, an analyst at Deutsche Bank Research.
“Russia was an important element of the sales growth in 2021 for Inditex,” Cochrane added.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Zara owner Inditex shutters shops in Russia
Spanish fashion retailer Inditex has halted trading in Russia, closing its 502 shops and stopping online sales, the company said n Saturday.
The Zara owner is following some of the biggest Western brands which have suspended operations in Russia, including its main rival, H&M, following the invasion of Ukraine and the imposition of economic sanctions.
“In the current circumstances Inditex cannot guarantee the continuity of the operations and commercial conditions in the Russian Federation and temporarily suspends its activity,” the world’s biggest fashion company said.
Russia accounts for about 8.5% of the group’s global earnings before interest and tax, and all the Inditex stores operate on a rental basis, Inditex said. “The investment is not relevant from a financial point of view.”
Inditex said it would give its workforce of more than 9,000 people a special support plan, without giving any details. The group’s 79 stores in Ukraine have already been temporarily closed.
Spain’s second-largest fashion retailer, Mango, said on Thursday that it has temporarily closed its 120 Russian shops. Tendam, the third-largest clothing group, said it took a similar decision on Saturday.
“The combination of the weakness in the rouble, resulting in large price increases for the Russian consumer, and increased logistical difficulties will make operations difficult for all retailers importing into Russia, even if there are no direct sanctions on their product categories,” said Adam Cochrane, an analyst at Deutsche Bank Research.
“Russia was an important element of the sales growth in 2021 for Inditex,” Cochrane added.
Reuters
Microsoft is the latest Western company to distance itself from Moscow
London Stock Exchange suspends 28 companies with ties to Russia
Western companies move to reduce their exposure to Russia
Mondi optimistic about market share gains, but Russian threat casts a shadow
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Foreign media halt reporting after Russia passes law on ‘fake news’
Kyiv residents dig in for battle as Russian forces bombard nearby towns
Scores held at anti-war protests in Russia, says watchdog
MICHAEL AVERY: ANC mum as revanchist Russia bombs civilians
Brics bank halts new transactions in Russia
Italian insurer Generali plans to pull back from Russia
World outrage over Ukraine invasion will inform China’s push for ...
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.