Europe 1 with AFP 10:19 a.m., September 29, 2022

The invasion of Ukraine by Russian troops continues to impact the economy.

This time, it is the Swedish ready-to-wear giant H&M which suffers the consequences.

With its withdrawal from Russia, the brand saw its net profit drop by 89% in the third quarter, or 49 million euros.

After ceasing its activities in Russia, H&M sees its net profit fall.

The Swedish clothing giant recorded an 89% drop in net profit in the third quarter on Thursday, September 29, weighed down by a provision linked to its withdrawal from Russia after the invasion of Ukraine.

The world number two in the sector, whose quarterly net profit fell to 531 million crowns (about 49 million euros) over the period, also announced a new plan aimed at annual savings of 2 billion crowns.

>> READ ALSO - 

Sanctions against Russia: Brussels proposes to the 27 to cap the price of Russian oil

A decrease of 49 million euros

Between July and September, H&M's quarterly net profit was divided by nine to 531 million crowns (about 49 million euros), well below the expectations of analysts polled by Bloomberg and Factset.

“The third quarter was largely affected by our decision to pause our activities in Russia and then to withdraw there,” commented CEO Helena Helmersson in the group’s financial report.

“It had a significant effect on our sales and profitability, which explains half of the decline in profits,” she added.

Thirty stores closed in Russia

H&M's turnover reached 57.5 billion crowns, an increase of 3%, in line with analysts' expectations, according to Factset.

The Swedish giant did not detail the measures of its savings plan which will include "cost reductions and efficiency improvements".

After shutting down all of its sales in Russia in March after Moscow invaded Ukraine, the group announced in July that it would withdraw from Russia, thus incurring a cost of 2.1 billion crowns. .

The amount turned out to be higher than expected due to the decline in the value of the Swedish krona on the foreign exchange market, the group explains.

>> READ ALSO - 

Nord Stream: Russia opens an investigation for "act of international terrorism"

To date, the group has "just over 30" stores permanently closed out of the 172 H&M brands in Russia.

H&M will also close its three stores in Belarus.