Global fast-fashion retailer H&M announced Monday that it has decided to begin the process of winding down its business in Russia, joining a growing number of corporations that have decided to permanently leave the country.
H&M Group, Swedish fashion giant, has had a presence in Russia since 2009; however, after Moscow’s invasion of Ukraine early this year, the company temporarily halted business there since March. Russia was the sixth largest market for H&M, and the company was expanding its shop count there while cutting its physical stores in many other countries.
“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”, says Helena Helmersson, CEO H&M Group.
In order to offload leftover stock in Russia, physical stores will reopen for a limited time as part of the winding down process. The total cost to the H&M Group from the wind-down is estimated to be around 2 billion Swedish crowns ($191.3 million), with a cash flow effect of around 1 billion crowns will have a cash flow impact.