one of the hot potatoes faced by the non-executive president InditexAs soon as Marta Ortega and CEO, Óscar García Maceiras, arrive at their duties on April 1, Russia. Less than a month ago, on March 5, ten days after the start of the war in Ukraine, the Galician multinational announced: Closed more than half a thousand businesses online stores of its owned and brands in this country. This was no trivial decision. There is a Russian market second in importance after Spain. It has 515 sales points and more than 9,000 employees there. represents about 8% of your earnings.
So Russia is one big hot potato. To avoid a loss on its accounts, the Group has made a provision of 216 million for losses arising from the suspension of operations in Russia this fiscal year, which began on February 1 and will end on January 31 of next year. According to his estimation, there is no activity in this market Costs about 20 million per monthbetween store closures, rent due and employees’ payrolls.
More than seven months later, the second largest world market, the closed sign hanging on the doors of its businesses and the multinational at home that must be paid every month to 9000 employees, seek alternative to defuse the situation. Despite the information pointing to exit from the Russian market, Inditex, continue your work in Russia after the conflict is over warrior But it will be with some changes.
The answer lies in the requests from the building owners that house the textile group’s stores in that country. unpaid rent by the multinational. One of them was known on September 30 and belonged to the Arbitration Court of Samara, the sixth most populous city in Russia.
The owner of several shopping centers in this city in southwestern Russia demanded that the Inditex subsidiary in that country compensate for the damage caused by the closure of the stores. Claims to be more than 8 million euros, a figure that includes rent, fines and damages earnings.
The court upheld the complaint but appealed the decision, saying it plans to reopen Zara stores. “The applicant states that he has not withdrawn from the Russian market, (…) the defendant is taking measures to continue his activities in the Russian Federation, change the corporate structure having a jurisdiction unrelated to hostile jurisdictions and replacing supply chains with non-enforceable ones” sums up the court decision.
Inditex confirms that, in accordance with this judicial act of September 30, it has not left the Russian market and plans to resume commercial activity in the Russian Federation. However, he plans changes in the organizational structure of your subsidiary in this country to continue operating there.
According to Russian media outlet Kommersant, the company founded by Amancio Ortega, Transfer your Russian assets to partners in a “friendly” countryfor example, from Southeast Asia or the Persian Gulf, in order to avoid sanctions and continue their activities in Russia.
multinational neither confirmed nor denied this information. “Since the suspension of business activity in the Russian Federation last March, Inditex has been monitoring the market situation with the priority of maintaining the highest possible employment level. In this framework, Inditex analyzes different scenarios and conducts exploratory talks with interested parties about potential alternatives.”
Inditex operated with 515 establishments in Russia at the end of fiscal 2021. Most of them, 106 corresponds to Bershka, 86 stores are from Zara and 86 are from Pull&Bear. Massimo Dutti, Stradivarius, Oysho and Zara Home operated in the country with 60, 74, 62 and 10 sales points, respectively.