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Zara owner Inditex receives approval to sell business in Russia

Inditex, owner of clothing chain Zara, has obtained permission from Russia to sell its business in what was once its second largest market by number of stores.

United Arab Emirates’ Daher Group plans to acquire business from the world’s largest fashion retailer. Russia’s Foreign Investment Committee approved the sale at the end of March, as all Western companies leaving the country require its approval. The decision was confirmed on state television on Wednesday.

Five months after Inditex announced its preliminary agreement with Dahel, more than a year after it suspended operations in Russia following Moscow’s full-scale invasion of Ukraine, many foreign It highlights the lengthy journey companies face when leaving the country.

The deal was announced by Deputy Trade Minister Viktor Evtukhov. [countries friendly to Russia]”. The company was founded by Daher for the deal, a person close to the deal told the Financial Times.

Inditex, which has brands such as Bershka and Pull&Bear, has 514 stores in Russia, 245 of which are included in sales, according to its 2022 annual report. The rest of the company’s stores in the country will be closed.

Inditex declined to comment.

The value of the transaction was not disclosed and the sale has yet to take place, according to the Russian Business Registry.

Since last year, companies from so-called unfriendly countries have required approval from Russia’s Foreign Investment Commission. Basic acceptance criteria include selling at a minimum of 50% discount and direct “voluntary selling”. contribution” To the Russian state.

Evtukhov said the main condition of the sale was the retention of employment. “The group now employs 4,200 people, and a representative of the new owners confirmed they are keeping them,” he added.

Inditex CEO Oscar Garcia Said In March, the company said it was willing to return to Russia if “things change”, but admitted it was unlikely to do so in the short term.

Stores will reopen by late spring under several new brand names. “The collection with the new tags has already been sewn and brought to Russia,” Evtukhov said.

https://www.ft.com/content/11b7edb5-8d3e-4d82-9249-cd15a80b56bc Zara owner Inditex receives approval to sell business in Russia

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