The H&M logo on a closed store in Moscow, Russia
The Swedish multinational clothing store H&M (Hennes & Mauritz), which had already suspended its sales in Russia in March, announced on Monday that it will gradually leave that country as a result of the invasion of Ukraine. “After a mature reflection, we see that it is impossible to continue our activity in Russia taking into account the situation”, declared the CEO of the group Helena Helmersson in a statement.
As part of its departure from the Russian market, H&M plans to temporarily reopen its stores, closed a few days after the invasion of Ukraine, to sell the remaining products. Established in Russia since 2009, H&M has around 6,000 employees in the country.
Helena Helmersson, CEO of Swedish fashion firm H&M
“We are deeply saddened by the impact this will have on our colleagues and we thank them for their work and dedication.”Helena Helmersson added. According to the group, this withdrawal should cost it a total of 2 billion Swedish crowns (about 192 million dollars), including a reduction in its liquidity of about 1 billion crowns. The losses will be charged to the accounts for the third quarter of 2022, the company said.
“Given the current operational challenges and an unpredictable future, the company announces today that it has decided to start a process of liquidation of the business in the country”has announced the multinational, which has been operating in Russia since 2009.
As part of the process of liquidating the business, H&M’s intention is to temporarily reopen physical stores in Russia for a limited period of time in order to sell remaining inventory. Thus, the process is expected to cost the company approximately SEK 2 billion, of which approximately half will have an impact on cash flow. The full impact will be included as exceptional costs in the results of the third quarter of 2022, the company added.
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