By Guest Writer •
Published: 27 Oct 2022 • 16:04
Massimo Dutti store Moscow will close
Credit: Inditex Media Centre
It has now written to the National Securities Market Council advising that it has reached an initial agreement for the sale of its business in the Russian Federation to Daher group based in the United Arab Emirates.
Daher has significant interests in the retail and real estate industry and the currently unreleased full terms of the transaction, which is subject to government approval, will enable the preservation of a substantial number of jobs generated by Inditex Group in Russia.
This is not a simple way of ‘white washing’ continued trade in Russia by supplying branded goods to Daher and the agreement anticipates the takeover of the 515 stores and their staff.
Daher will (subject to agreement of landlords of the properties where leases are being transferred) rename the stores and stock their own brands which are completely unrelated to Inditex.
The transaction will mean the termination of Inditex’s operations in the Russian Federation, after sales were paused on March 5.
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 estimates that a 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.
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