Late last month, Nike said it was shuttering Russian operations for good after first closing stores and then cutting ties with Russian franchisees.Īnd ocean carrier giant A.P. H&M is the latest Western company to ultimately decide to exit Russia as the war drags on and Western sanctions complicate operating in the country.
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The full amount will be included as one-time third-quarter costs.Īlthough operations in Belarus remain shuttered, H&M has not indicated it would permanently exit the market. The entire liquidation is projected to cost H&M a total of approximately 2 billion kronor (approximately $193 million), of which approximately 1 billion kronor (approximately $96 million) will have a cash flow impact. The combined assets in Russia, which include current stock-in-trade, cash and cash equivalents, equipment and right-of-use assets, amounted to 4.4 billion Swedish kronor (approximately $427 million) at the end of the quarter. As part of the winding down process, the retailer is temporarily reopening physical stores in Russia for a limited period of time to clear through inventory. However, H&M‘s exit isn’t complete just yet. The company’s strong second-quarter results likely aided in its confidence to make the full exit, with net sales increasing 17 percent to 54.5 billion kronor ($5.3 billion) from 46.5 billion kronor ($4.6 billion) in the period. H&M rents the stores in the market and operates them directly. The company also opened its first Arket store in the country in December 2021. 30, 2021, H&M Group operated 168 stores in Russia, alongside its e-commerce site, all of which have been shuttered since March 2. H&M has operated in Russia since 2009, with the market representing 4 percent of the retailer’s sales in the 2021 fourth quarter. Furthermore, we wish to thank our customers for their support throughout the years.” “We are deeply saddened about the impact this will have on our colleagues and very grateful for all their hard work and dedication. “After careful consideration, we see it as impossible given the current situation to continue our business in Russia,” said Helena Helmersson, CEO of H&M Group, in a statement. The Swedish fast-fashion giant pointed to “current operational challenges” and an “unpredictable future” in a statement outlining the factors behind its decision to quit Russia.
Four months after it paused operations in Russia, H&M Group is formally exiting the country waging a deadly war in Ukraine.
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