Fast-moving clothing brand H&M has decided to withdraw from the Russian market.
On July 18, according to RIA Novosti, the Swedish clothing company Hennes & Mauritz AB (H&M for short) said on the same day that it had decided to close its business in Russia.
H&M suspended operations in Russia, its sixth-largest market, in early March.
H&M said in a statement: "On March 2, 2022, the H&M Group announced the suspension of all sales in Russia. In view of the current operational challenges and the unpredictable future, the company announced today that it has decided to initiate procedures to cease operations in Russia."
According to Bloomberg, H&M said a cost of 2 billion kronor (about $190 million) related to the closure of the business will be included in the third-quarter results of this year, of which about 1 billion kronor will have an impact on cash flow.
The group plans to temporarily reopen brick-and-mortar stores in Russia to sell remaining inventory.
Included in the one-time cost is the reversal of an unrealized exchange gain of SEK 353 million due within the group due to Russian rubles from the second quarter of this year, the company said.
H&M's Russian business accounted for about 4 percent of its total sales in the last fiscal year, data show.
Currently, all H&M stores in Russia, Belarus and Ukraine are closed, Dow Jones Newswires reported.
The 181 stores, which employ around 7,500 people, accounted for around 10% of the group's operating profit in the 2019 financial year, before the Covid-19 pandemic.
Since the escalation of the conflict between Russia and Ukraine in February, many companies have announced to suspend or withdraw from their business in Russia, involving McDonald's, Coca-Cola, Starbucks, as well as Decathlon, Uniqlo parent company Fast Retailing, IKEA, Apple, IBM, Ford, Boeing and even Visa, MasterCard Cards, etc.
On July 5, local time, the American restaurant chain Yum! (NYSE: YUM) announced that it is negotiating with Russian buyers to sell KFC stores and franchises in Russia.
If the negotiations are successful, Yum! plans to completely withdraw from the Russian market.
Yum also said it had sold its Pizza Hut business in Russia to a local operator, which was renaming the restaurants.
Yum did not disclose financial details of the deal.
After a number of international brands withdrew from the Russian market, Russian companies also began to take over the business of these brands in Russia and completely "reinvented themselves".
According to a report by the Russian business daily "Gazette" on July 7, the Russian version of Starbucks will be renamed and reopened.
American Starbucks Corp. has found a new buyer for its Russian business - Anton Pinsky, founder of Russian restaurant company Pinsky.
The deal, which is expected to close by July 20, includes the transfer of leasehold rights to all Starbucks coffee stores, the report said.
On June 12, the first batch of local Russian McDonald's have reopened, renamed "Vkusno i tochka", which means "it's so delicious".
The Russian version of McDonald's not only changed the brand name, but also changed the brand logo, menu and dish names.
The new owner of the Russian version of McDonald's, Alexander Govor, previously ran a McDonald's franchise in Siberia.
Data show that H&M's revenue in the second quarter increased by 17% year-on-year to SEK 54.5 billion, and net profit increased from SEK 2.7 billion to SEK 3.6 billion, but sales in the Chinese mainland market fell 23%.