MADRID – Inditex has decided to close its 502 stores in Russia as a result of Russia’s invasion of Ukraine. After Spain, Russia is the second market for the Spanish multinational. Inditex is known for fashion chains such as Zara, Bershka and Pull & Bear.
That means 9,000 people will lose their jobs. “Inditex informs that in the current circumstances we cannot guarantee the continuity of the activities and commercial conditions in the Russian Federation and is temporarily suspending its activities in 502 stores (including 86 Zara branches) and of the online sales channel in the country”. The company said this in statement to the National Stock Exchange Commission.
Its stores in Russia make up 8.5% of the textile giant’s global net income. The company was founded by Amanio Ortega, who became the richtest man of Spain. Inditex has emphasized all stores are on a rental basis, so from a financial point of view the investment is not relevant.
Support for staff
The company has also said that its 9,000 employees are now a priority. For them Inditex is working on a special support program that they will roll out as soon as possible.
Shares of Inditex down
Shares of the Galician company fell by 3.78% to EUR 20.36 on Friday. The company registers a 16% loss since the war began on Thursday, February 24. Inditex made the decision to withdraw from Russia only after other companies in the sector, such as H&M with 168 branches in Russia and Mango with 120 branches, did the same.
Of the 30 companies in the world most exposed to the war in Ukraine, Inditex is the only Spanish one to make an appearance. This is according to a report by the market analysis firm Macro Yield.
Inditex is a Spanish listed fashion giant based in the city of A Coruña, Galicia. It is the largest fashion group in the world in terms of turnover. On their website Inditex says “Inditex is one of the world’s largest fashion retailers, with eight brands (Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe) selling in 216 markets through its online platform or its 6,654 stores in 96 markets. We have come a long way since 1963, when we started out as a small family business in a workshop making women’s clothing. Over the years, our size may have changed, but one underlying idea has stayed the same. The customer is at the centre of everything we do.”