Zara stores owner Inditex has reached an agreement to sell its Russian business to a Lebanese retail and real estate conglomerate, the Spanish fashion giant announced in a statement to Spain’s competition authorities, the Comisión Nacional de los Mercados y la Competencia (CNMC), on Tuesday.
The buyer is Daher Group and the potential purchase is pending approval from Russian authorities, Inditex said, without disclosing financial details.
‘The terms of the transaction, subject to government approval, will enable 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,’ the statement from Inditex read. ‘Subject to agreement by the landlords, these premises will accommodate stores of brands owned by the buyer group, unrelated to Inditex.’
Inditex halted its business in Russia on 5 March, shortly after Russian President Vladimir Putin ordered the invasion of Ukraine at the end of February. Following other western brands, the fashion retailer closed its 502 shops and stopped online sales.
‘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,’ the statement continued.
Inditex also said that it estimates that 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’.
The statement to CNMC made no direct reference to the war in Ukraine.
Founded by Ortega in 1975 in La Coruña, in the northwestern region of Galicia, today the Inditex group comprises of globally recognised fashion brands including Zara, Bershka, Stradavarius, Pull and Bear, Oysho and Massimo Dutti. Its annual sales are over 20 billion euros.