Inditex weighs the sale of its business in Russia, although it could continue operating in the country with Zara

Zara would change its name in Russia and Massimo Dutti, Oysho or Zara Home would leave Russia86 of the 502 stores that Inditex has in Russia belong to ZaraIn 2020, Inditex stores in Russia had a turnover of 86 million eurosInditex is studying the possibility of selling its business in Russia in a context marked by the war in Ukraine, although it could continue to operate in the country with Zara, which would change its name, while Massimo Dutti, Oysho or Zara Home would abandon the Russian market completely. Specifically, according to the Russian media ‘Kommersant’, the company founded by Amancio Ortega is considering the possibility of transferring its Russian assets to partners in a “friendly” country, for example, from Southeast Asia or the Persian Gulf. Sources consulted by ‘Kommersant’ have explained that the transfer of Inditex’s Russian business to partners will take six months to a year and they have pointed out that Massimo Dutti, Oysho and Zara Home will abandon the Russian market altogether, while the r this of brands, including Zara, will open with other names and with new collections not before spring 2023. Polish brands did the same last summerA similar scenario was previously implemented, last July, by the Polish retailer LPP, with brands such as Reserved, Cropp, Mohito and Sinsay, which transferred stores in the Russian Federation to a company registered in the United Arab Emirates. At the same time, the fashion group’s points of sale resumed their activity, but under new labels. The CEO of Inditex, Óscar García Maceiras, stated on Tuesday that the company continues to support its teams in Russia and Ukraine since last March it suspended its operations in both markets with the start of the war. García Maceiras, who made these statements during his visit to the Zaragoza Logistics Platform (Plaza), recalled that already on March 5, Inditex announced that its main objective was to support its teams in Russia and Ukraine, which it has continued to provide. “We continue to monitor the situation and assess different alternatives,” said the CEO after learning that the company is studying the sale of its business in Russia, although could continue operating in the country with Zara. It has also indicated that last June the company provisioned 216 million euros to cover estimated expenses up to the f in this exercise in both countries. Inditex has increased its sales by 24% in other places, after closing the Russian market, company sources have indicated. More than 500 stores in Russia Last March, days after the war began, Inditex decided to close its 502 stores in Russia, its second market after Spain, with more than 9,000 employees, and suspend online sales in that country as a result of the Russian invasion of Ukraine. Of the 502 stores, 86 are Zara. Of the 502 stores, 86 are ZaraRussia constitutes about 8.5% of the group’s global net operating income (Ebit). Specifically, the result before taxes of this market was 86 million euros in 2020 (229 million euros in 2019), with sales close to 5% of the total, which represents more than 1,000 million euros. The company founded by Amancio Ortega, highlighted at that time that all stores operated on a rental basis, so the investment was not relevant from a financial point of view.