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Zara owner Inditex closes Russian stores and online platform -Breaking

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© Reuters. One building can be seen in the window at Zara’s Zara clothing shop, which is part the Spanish Inditex Group in Bilbao. It was taken November 30, 2021. REUTERS/Vincent West

MADRID (Reuters), -Spanish fashion retailer Inditex The company announced that (MC:), has stopped trading in Russia and closed its 502 stores. It also stopped online sales.

The Zara owner is following some of the biggest western brands which have suspended operations in Russia, including its main rival H&M, following the invasion of Ukraine and the imposition of economic sanctions.

The world’s largest fashion house stated that Inditex could not guarantee continuity in Russian Federation operations or commercial conditions and suspended its activities temporarily.

Inditex reported that Russia represents 8.5% of their global EBIT (earnings prior to interest, tax), and all Inditex stores work on a rent basis. According to Inditex, “Investment is irrelevant from a financial standpoint.”

Inditex stated that it will provide a support plan for its more than 9000 employees, but did not give any specifics. According to Inditex, its stores in Ukraine had been closed temporarily.

Mango, Spain’s largest fashion retailer, announced on Thursday that it would temporarily close its Russian stores. Tendam, third-largest clothing company, stated on Saturday that it made a similar announcement.

Analyst Adam Cochrane said that the combination of weakening the ruble and logistical problems will make it difficult for Russian retailers to import into Russia. Deutsche Bank (DE:) Research, said.

Cochrane stated that Russia played a significant role in Inditex’s 2021 sales growth.

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