H&M to sell Russian business to local or foreign company – ministry
H&M, the world’s second-biggest fashion retailer, has decided to sell its assets in Russia, the Russian Ministry of Industry and Trade said on Thursday.
The potential buyer could be a Russian company or an entity from a “friendly” country – one of those that have not imposed sanctions against Russia, the ministry added.
H&M said earlier this month it had decided to initiate a process of winding down its business in Russia.
The move will cost almost $200 million and affect 6,000 staff as it joins a growing number of companies fully exiting the country.
The company suspended its business in Russia in early March in the wake of Western sanctions against Moscow following its invasion of Ukraine.
Russia was H&M’s sixth-biggest market and the company was increasing its store count there while reducing physical stores in many other markets.
“After careful consideration, we see it as impossible given the current situation to continue our business in Russia,” Chief Executive Helena Helmersson said in a statement.
“We are deeply saddened about the impact this will have on our colleagues,” Helmersson said but did not elaborate. A company spokesperson said about 6,000 employees in the country would be affected.
Russia was one of H&M’s fastest-growing markets, and one of its most profitable, said RBC Capital Markets Richard Chamberlain, calling the decision to pull out “somewhat inevitable”.
H&M intends to temporarily reopen physical stores in August to sell the remaining inventory in Russia, a spokesperson said.
The shutdown will affect the company’s 170 physical stores in the country and its online sales channels, a spokesperson said. H&M rents the stores and operates them directly.
Email this article to a friend
You need to be logged in to use this feature.
Please log in here