Madrid, Spain – Inditex (ITX.MC), the Spanish clothing company that owns Zara, has agreed to sell its stores in Russia to the UAE-based Daher Group, though it did not completely rule out returning there if things changed, Reuters reported. Â
Following Moscow’s invasion of Ukraine on February 24 and Western sanctions, Inditex closed its over 500 stores in Russia in March.
The Lebanese Daher family owns Azadea, a retail chain with its headquarters in Beirut. Since 1998, Zara and Azadea have collaborated on projects for other well-known international brands.
H&M, the biggest international rival of Zara, said in July that it will cease operations in Russia.
The United Arab Emirates and a number of other Gulf and Asian countries are regarded by the Kremlin as friendly states, and their companies are encouraged to conduct business in Russia.
The company said Tuesday that the sale of its business in Russia would enable the preservation of a “substantial number” of jobs through the transfer of leases, which will pass to brands owned by Daher.
A well informed source who was not authorised to speak publicly told AFP that the United Arab Emirates-based Daher group is Inditex’s franchisee in the Middle East.
Inditex’s other brands include younger fashion chain Pull&Bear and upmarket label Massimo Dutti.
The company posted a net profit of 1.8 billion euros in the first six months of 2022, a 41-percent increase from the same period last year.
Inditex said the opening of new stores and rising online sales helped offset the closures in Russia.
It set aside 216 million euros in provisions in the first quarter to cope with the closures.