STOCKHOLM – Fast fashion giant H&M will temporarily reopen its physical stores in Russia to sell off remaining inventory before withdrawing completely from the country. H&M Group has run operations in Russia since 2009 and at one time had 168 stores in the country.
In a statement, it said: “The company regrets that the business cannot continue under the current circumstances and that many colleagues are affected as a consequence. The focus now is to ensure a responsible wind down of operations and support all colleagues concerned in the best possible way over the coming months.
“After careful consideration, we see it as impossible given the current situation to continue our business in Russia. We are deeply saddened about the impact this will have on our colleagues and very grateful for all their hard work and dedication. Furthermore, we wish to thank our customers for their support throughout the years.”
The entire wind-down is expected to lead to costs for the H&M group of around 2 BSEK (US$190m) of which half will have a cash flow impact. The full amount will be included as one-time costs in the company’s results for the third quarter 2022.
H&M suspended all sales to Russia following the military invasion of Ukraine in March. Many of the world’s leading fashion brands and retailers have now exited the Russian market. It was expected this might be a temporary measure. However, the Russian invasion of Ukraine has become more protracted than expected. Remaining active in Russia is now inconceivable for western fashion brands.