Spanish firm is latest western brand to halt operations amid sanctions over Ukraine invasion and rouble weakness
The Spanish fashion retailer Inditex, which owns Zara, has halted trading in Russia, closing its 502 shops and stopping online sales, the company said.
The Zara owner followed other big western brands which have suspended operations in Russia, following the invasion of Ukraine and the imposition of economic sanctions.
The payments company PayPal shut down its services in Russia early on Saturday, citing “the current circumstances”.
Meanwhile, Samsung has suspended shipments to Russia over “geopolitical developments”, the firm said on Saturday.
Several firms have announced a suspension of activities in Russia, including H&M, Apple and Ikea.
In a statement, Inditex said: “In the current circumstances Inditex cannot guarantee the continuity of the operations and commercial conditions in the Russian Federation and temporarily suspends its activity.”
Russia accounts for about 8.5% of the group’s global earnings before interest and tax, and all the stores operate on a rental basis, Inditex said, adding: “The investment is not relevant from a financial point of view.”
Brands that have quit Russia
A number of companies have pulled their operations and services in Russia since its invasion of Ukraine. These include:
Retailers
- Ikea has temporarily closed all stores and factories in Russia, affecting 15,000 workers. It has shuttered its 17 outlets across Russia but said it would keep its Mega shopping centres open.
- H&M has temporarily suspended all sales in Russia. The firm said that shops in Ukraine had already been closed temporarily “due to the safety of customers and colleagues”.
- JD Sports has ceased all trading in Russia across both its brand websites and wholesale channels, adding that it represented less than 0.05% of annual revenues.
- Mango, the Spanish clothing retailer, said it was temporarily closing its shops and its online sale website in Russia, while it is monitoring “with sadness and concern” the situation in Ukraine.
- Nike has said it is stopping Russian customers from buying online.
- Adidas has suspended its partnership with the Russian Football Union.
- Marks & Spencer has suspended shipments to its Turkish franchisee’s Russian business. Operation ceased last week at its 10 stores in Ukraine, which employs 250 people. It has 48 stores in Russia and 1,200 employees, also via the franchisee.
- Boohoo has halted sales in Russia and closed its Russian trading websites.
- Asos has suspended sales in Russia. It said it was “neither practical nor right to continue to trade in Russia”.
Travel
- Airbnb has suspended all operations in Russia and Belarus. It has also taking bookings from people in both countries.
- Expedia has stopped selling travel in and out of Russia.
Carmakers
- Volkswagen has stopped production of vehicles in Russia “until further notice”. Vehicle exports to Russia have also been stopped “with immediate effect”, it said.
- Toyota halted production at its St Petersburg plant and vehicle imports into the country have also stopped indefinitely.
- General Motors, Jaguar Land Rover and Renault have halted sales and operations in Russia. Mercedes-Benz said it will stop selling cars and vans to Russia, as has Aston Martin. Harley-Davidson has halted motorcycle shipments to Russia.
Drinks industry
- Diageo, the maker of Smirnoff vodka and Guinness has paused exports to Russia and Ukraine.
- Coca-Cola HBC has halted production at its bottling factory in Kyiv and evacuated its employees.
Tech, media and entertainment
- Apple has paused sales in Russia.
- Meta, owner of Facebook, said it had stopped recommending content from Russian state media to all users of Facebook, with Instagram to follow.
- Google has suspended all advertising in Russia after the country’s internet regulator demanded the company stop showing what it considered were adverts displaying false information about Russia’s invasion of Ukraine.
- Walt Disney Company is pausing its release of films in Russia.
- Netflix said it has no plans to distribute news, sports and entertainment channels from Russian state media.
Luxury goods companies
- Burberry has halted all shipments of luxury goods to Russia “due to operational challenges”.
Manufacturing
- JCB, the British construction equipment maker, said it had paused all operations, including the export of machine and spare parts in the country.
Inditex said it would give its workforce of more than 9,000 people a special support plan, without giving any details. The group had said its 79 stores in Ukraine had already been temporarily closed.
Spain’s second-largest fashion retailer, Mango, said on Thursday it was temporarily closing its 120 Russian shops, and Tendam, the third-largest clothing group, said it had taken a similar decision on Saturday.
Adam Cochrane, an analyst at Deutsche Bank Research, said: “The combination of the weakness in the rouble resulting in large price increases for the Russian consumer and increased logistical difficulties will make operations difficult for all retailers importing into Russia, even if there are no direct sanctions on their product categories.
He added: “Russia was an important element of the sales growth in 2021 for Inditex.”
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