Following its decision to pause all sales in Russia, as announced March 2, the H&M Group has now said that it will be taking steps to wind down its business in the country, citing “operational challenges and an unpredictable future”.
As part of the process, the group, which has been operating in the region since 2009, will temporarily reopen its physical stores to sell its remaining inventory.
“After careful consideration, we see it as impossible given the current situation to continue our business in Russia,” said Helena Helmersson, CEO of the group, in a statement provided to FashionUnited.
Helmersson continued: “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.”
New laws in Russia
The fast fashion group said that it “regrets” that it could not continue its operations, however, it noted its intention to ensure a responsible winding down process and support of its colleagues over the coming months.
H&M added that it expects the winding down to cost a total of approximately two billion Swedish crowns (160.99 pounds), one billion of which will have a cash flow impact.
The full amount will be included as one-time costs in its results for the third quarter of 2022.
It joins a number of Western companies making the step to fully exit Russia since its invasion of Ukraine in February.
Most recently, US sportswear giant Nike completely cut ties with the market, while LVMH-owned beauty retailer Sephora sold its Russian subsidiary.
The latest spate of exits comes ahead of new laws set to be introduced in Russia, which will allow the state to seize assets of companies that have suspended business in the country.