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October 26, 2022

Inditex exits Russia on sale of businesses to Daher

Zara-owner Inditex has confirmed it is ending operations in Russia after it reached an agreement to sell its Russia businesses to UAE-based Daher Group.

By Hannah Abdulla

The move comes after Inditex paused its operation in Russia on 5 March.

In a securities market disclosure, Inditex said the deal would allow the preservation of a substantial number of jobs generated by Inditex Group in Russia, as it includes the transfer of most of the lease contracts related to stores. 

Daher Group has prominent interests in the retail and real estate industry.

“If in future Inditex considers that new circumstances allow the return of the Group’s brands to this market, Inditex and the Daher group have the option of a potential collaboration through a franchise agreement,” Inditex added.

The Pull & Bear and Bershka owner estimates the provision included in the first half 2022 financial statements sufficiently covers the impact of the termination of the group’s business activities in the Russian Federation.

Last month, Inditex published its half-year results in which it said net income reached “historic highs”.

Sales reached EUR14.8bn (US$14.79bn), 24.5% higher than H1 2021.

Net income increased 41% to EUR1.8bn

Inditex says it is expecting supply chain tensions to surface in the second half and has moved to temporarily accelerate autumn/winter inflows in order to increase product availability without any change to commitment levels. Inventory as of 31 July increased 43% on this basis.

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