Inditex sells its business in Russia to the Emirati group Daher, owner of the Dubai Mall

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Oct. 25 () –

Inditex has reached an initial agreement for the sale of its business in the Russian Federation, made up of 502 stores and more than 9,000 employees, to the Daher group, owner of the Dubai Mall and with significant holdings in the distribution and real estate sectors.

The terms of this operation, subject to prior administrative authorisation, will allow the preservation of a substantial part of the jobs held by the Inditex Group in Russia, by including the transfer of most of the premises occupied until now by its stores, as reported by this Tuesday the group, which does not reveal the amount of the transaction.

Company sources have told Europa Press that the operation has been carried out in the “best possible conditions” for employees with the aim of preserving employment.

Subject to agreement with the owners, these premises will house the future points of sale of brands owned by the purchasing group, totally unrelated to Inditex.

The transaction with Daher, one of the shareholders of Azadea, a partner of Inditex in the Middle East and North Africa, will mean the cessation of operations of the company founded by Amancio Ortega, in the Russian Federation after the suspension of its commercial activity last March 5th.

POSSIBILITY OF COLLABORATION

In the event that new circumstances arise in the future that, in Inditex’s opinion, would allow the Group’s brands to return to this market, the Galician company and the Daher group contemplate in their agreement the possibility of a collaboration between the two through a franchise agreement.

Inditex estimates that the provision recorded in the financial statements in the first half of 2022 substantially covers the impact of the Group’s cessation of activity in the Russian Federation.

Last March, days after the war began, Inditex decided to close its 502 stores in Russia, its second market after Spain, with more than 9,000 employees, and suspend online sales in that country as a result of the Russian invasion of Ukraine. Of the 502 establishments, 86 are Zara.

Russia constitutes around 8.5% of the group’s global net operating profit (Ebit). Specifically, the result before taxes of this market was 86 million euros in 2020 (229 million euros in 2019), with sales close to 5% of the total, which represents more than 1,000 million euros.

The CEO of Inditex, Óscar García Maceiras, stated last week that the company continued to provide support to its teams in Russia and Ukraine since it suspended its operations in both markets last March with the start of the war.

“We continue to monitor the situation and assess different alternatives,” said the CEO at that time during his visit to the Zaragoza Logistics Platform (Plaza).

He also explained that last June the company provisioned 216 million euros to cover the estimated expenses until the end of this year in both countries. Inditex has increased its sales by 24% in other places, after closing the Russian market, company sources have indicated.

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