Friday, 28 October 2022, 09:55
Inditex has reached an agreement with the Daher group to sell its business in Russia, Spain's National Securities Market Commission (CNMV) reported this week.
The Spanish multinational, founded by Amancio Ortega, had been analysing this possibility for weeks, although it had considered continuing to operate the Zara fashion chain in Russia under a different name.
However, the company decided to sell its entire business to the Daher group, which has significant stakes in the distribution and real estate sectors.
Inditex said that the terms of the deal, subject to prior administrative authorisation, will allow for the preservation of a "substantial portion of the jobs held by the Inditex group in Russia".
The multinational said that the agreement - of which no financial details have been given - includes the transfer of most of the premises occupied until now by its stores.
"These premises will house the future points of sale of brands owned by the buyer group, totally unrelated to Inditex," explained the company, which since 5 March has suspended its activity in Russia due to the war with Ukraine.
Inditex added that if in the future "new circumstances were to arise that would allow the retaking of the group's brands in this market", it would contemplate the possibility of a "collaboration" with Daher through a franchise contract.
Only a week after the war began, Inditex decided to close its 502 stores in Russia (86 of which are Zara stores), its second largest market after Spain and where it had more than 9,000 employees. It also suspended online sales in the country.
Russia accounts for around 8.5 per cent of the group's global net operating income. The pre-tax result of this market was €86 million in 2020 (€229 million in 2019), with sales close to five per cent of the total, representing more than €1 billion
Inditex's CEO, Óscar García Maceiras, said last week that the company was continuing to support its teams in Russia and Ukraine while evaluating different alternatives. He also explained that last June the company made a provision of 216 million euros to cover the estimated expenses until the end of this fiscal year in both countries. Inditex has increased its sales by 24 per cent elsewhere, after closing the Russian market, company sources said.
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