(Bloomberg) — Inditex SA, the world’s biggest textile retailer, agreed to sell its business in Russia to Daher group, marking its withdrawal from the country.
(Bloomberg) — Inditex SA, the world’s biggest textile retailer, agreed to sell its business in Russia to Daher group, marking its withdrawal from the country.
The agreement will preserve a “substantial number of jobs” in Russia and Daher will also pick up most of Inditex’s store rental contracts, Arteixo, Spain-based Inditex said in a filing Tuesday.
Inditex expects provisions made in the first half of the year to cover the impact of exiting Russia. In June, the company said it had taken €216 million ($215 million) provision for shutting operations in Russia and Ukraine.
The apparel firm announced in March that it was closing all of its 502 shops in Russia and halting online sales after the invasion of Ukraine. Russia accounted for about 8.5% of total group earnings before interest and tax and was Inditex’s second-largest market by number of stores.
When Inditex said it was halting business in Russia, in line with other Western companies, it also said it would continue to pay salaries for some 9,000 workers and would seek to reach agreements with landlords. The announcements happened at the same time as the company was transitioning between its former and current chairmen.
Under the agreement, Daher will operate in Russia under its own brand but if at some future stage, Inditex wishes to return the country, the deal outlines the possibility of doing so through franchises.
Daher is based in the United Arab Emirates and has links to Azadea, a Lebanese company that operates Inditex franchises in the Middle East.
(Updates with number of workers in fourth paragraph)
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