Fashion retail giant H&M has decided to completely shut down its business operations in Russia, following the footsteps of other major global brands like Nike and McDonald's. This decision comes in response to Russia's invasion of Ukraine, which has led to international sanctions and pressure from consumers and investors.
H&M had about 170 stores in Russia and paused sales in March 2022. The closure of H&M stores in Russia, Belarus, and Ukraine has affected the Swedish retailer's overall revenue.
Chief Executive Helena Helmersson said in a statement to CTV News, "After careful consideration, we see it as impossible given the current situation to continue our business in Russia." Russia was the group's sixth-largest market at the end of 2021, representing around $200 million in revenue during the last quarter of that year. The company suspended its business in Russia in early March, in the wake of Western sanctions against Moscow.
H&M's exit from the Russian market is expected to cost almost $200 million and affect 6,000 staff members. The company plans to wind down its business in Russia, which includes shutting down its 170 physical stores and online sales channels. H&M rents these stores and operates them directly. Other retailers, such as Inditex, Adidas, TJX, and Poland's largest fashion retailer LPP, have also halted sales or decided to sell their businesses in Russia.
On November 30, 2022, Russians visited H&M's flagship Moscow store for the last time before the world's No. 2 fashion retailer closed all its stores in Russia for good, after a stock sale that lasted for almost four months. H&M announced on Thursday that it had closed its last remaining stores in Russia and Belarus, wrapping up its progressive withdrawal over the Ukraine conflict.
Several luxury brands, including Prada, Hermès, and Gucci, were initially left out of sanctions imposed by Western governments but have since committed to ceasing operations in Russia for the foreseeable future. H&M's biggest rival, Zara-owner Inditex, has also kept operations suspended for the time being.
