Inditex considers divesting Russian business, Zara could continue under new name
Europa Press
Roberta HERRERA
InditexZaraMassimo DuttiOyshoZara Home
According to the Russian daily newspaper Kommersant, the company founded by Amancio Ortega is considering whether to hand over its Russian assets to partners in a “friendly” country, such as in Southeast Asia or the Persian Gulf.
Sources interviewed by the newspaper explained that the handover of Inditex’s Russian business to its partners will take anywhere between six months and a year and added that Massimo Dutti, Oysho and Zara Home will leave the Russian market altogether, while the rest of the brands, including Zara, will open under new names and with new collections no earlier than spring 2023.
A similar scenario was previously played out last July by the Polish retailer LPP
In March, days after the war began, Inditex decided to close its 502 shops in Russia, its second largest market after Spain, with more than 9,000 employees, and to suspend online sales in the country as a result of the Russian invasion of Ukraine. Of the 502 stores, 86 were Zara shops.
Russia accounts for around 8.5% of the group’s global net operating income (EBIT). The profit before tax in the Russian market was €86 million in 2020 (€229 million in 2019), with sales accounting for around 5% of the total, or more than €1 billion.
Inditex stressed at the time that all its shops were operating on a rental basis, so the investment was not relevant from a financial point of view.
