Inditex sells its business in Russia to the Daher group and gets rid of all its stores

Archive image of Inditex.EUROPA PRESSThe textile group has sent a note to the CNMVIn it it indicates that it is selling its business to the Lebanese group DaherThe textile group leaves the door open to resume activityInditex leaves Russia. As reported by the company, the textile giant has reached an initial agreement for the sale of its business in that country to the Lebanese group Daher, which has significant holdings in the distribution and real estate sectors. This has been notified by the company to the National Securities Market Commission (CNMV). “The terms of this operation, subject to prior administrative authorisation, will make it possible to preserve a substantial part of the jobs held by the Inditex Group in Russia, by including the transfer of most of the premises occupied until now by its stores. Subject to agreement with the owners, these premises will house the future points of sale of brands owned by the purchasing group that are totally unrelated to Inditex”, the note informs. Inditex had 502 stores in Russia and had just over 9,000 employees. This decision marks the end of the Galician fashion group in Russia, after commercial activity ceased last March after the invasion of Ukraine. Even so, Inditex leaves open the possibility of returning to the country. “The transaction will mean the cessation of Inditex’s operations in the Russian Federation after the suspension of its commercial activity on March 5. In the event that new circumstances arise in the future that, in Inditex’s opinion, would allow the return of the group’s brands to this market, Inditex and the Daher group contemplate in their agreement the possibility between the two through a contract franchise”, indicates Inditex. Regarding the impact of the operation on the company’s accounts, Inditex estimates that “the provision recorded in the financial statements in the first half of 2022 substantially covers the impact of the Group’s cessation of activity on the Russian Federation”. Russia constitutes around 8.5% of the group’s global net operating profit (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.