Inditex will finally close 269 stores in Russia

The clothing chain Inditex (brands Zara, Bershka, Pull and Bear, Massimo Dutti, etc.) has decided to permanently close 269 out of 514 stores in Russia. About it informs newspaper El País, citing the company.

It is clarified that the assets and rights associated with the remaining 245 stores will be transferred to the Daher group, with which Inditex reached an agreement to sell the business in Russia at the end of October 2022. It is noted that the stores transferred to Daher account for 47.6% of the total, the Spanish Inditex is still waiting to close the deal.

“After the completion of the sale and purchase agreement, the transferred premises will house sales points of brands belonging to the Daher group, which are completely unrelated to the Inditex group,” the company said.

The Spanish newspaper, citing the financial statements of Inditex, notes that the amount of impairment of the value of investments in the seven subsidiaries of the group at the end of fiscal 2022 amounted to 2.211 billion euros.

The managing director of the company, Oscar Garcia Maceiras, reporting on the financial performance of Inditex on Wednesday, March 15, said that negotiations on the group’s departure from Russia are at the final stage. According to him, the company is waiting for the approval of the Russian authorities.

In an interview with the Financial Times, Garcia declaredthat Inditex is ready to return to the Russian market if the situation in the country changes. At the same time, he expressed doubt that this would happen in the near future. According to the deal with Daher, the Spanish company can resume its activities in Russia under a franchise agreement.

Inditex suspended the work of its stores in Russia on March 5, 2022 amid the start of a military operation in Ukraine, sanctions and problems with logistics. According to El Mundo, more than 500 stores of the group operated in Russia, 86 of which were under the Zara brand. Russia accounted for about 8.5% of the group’s global EBITDA.

At the end of 2022, Inditex net profit increased by 27% compared to 2021 and reached a record 4.13 billion euros, should from reporting. Revenue also grew by 17.5% compared to the previous year, to 32.6 billion euros. Its organic growth was 18%.