Inditex, the Zara clothing chain owner, has received permission from Russia to sell its business in the country once its second-biggest market by several stores.
Daher Group of the United Arab Emirates would acquire business from the world’s biggest fashion retailer. Russia’s commission on foreign investments, the approval of which every Western company exiting the country requires, authorized the sale at the end of March. The decision was confirmed on state television on Wednesday.
Expansion of ZARA
It comes five months after Inditex announced a preliminary agreement with Daher and more than a year after it suspended its Russian operations following Moscow’s full-scale invasion of Ukraine, highlighting the protracted journey many foreign businesses have faced as they leave the country.
The deal was announced by deputy trade minister Viktor Evtukhov, who described the buyer as Fashion and More Management DMCC. It “has an office in one of the [countries friendly to Russia].” Daher set up the company for the deal, a person close to the transaction told the Financial Times.
Inditex, whose brands include Bershka and Pull & Bear, had 514 stores in Russia according to its 2022 annual report, with 245 included in the sale. The rest of the company’s stores in the country are expected to close. Inditex declined to comment.
Inditex chief executive Óscar García said in March that the company would return to Russia if “the situation changed.” However, he admitted this was unlikely to happen in the short term.
The stores are scheduled to reopen before the end of the spring season under various new brand names. “Collections with new tags have already been sewn and provided to Russia,” Evtukhov said.