FT: Inditex clothing brands continue to operate in Russia – only the names have changed

Despite announcing a complete exit from the Russian market, Spanish Inditex – owner of the Zara, Bershka, Pull & Bear and Stradivarius brands – has retained the option of a quick return to Russia, according to a Financial Times investigation.

In March 2022, a few days after the start of a full-scale war, Inditex announced the cessation of operations in Russia.

In the fall of the same year, the company announced the sale of its Russian business to the Daher group, run by a Lebanese family that is already an Inditex partner in the Middle East.

Now the former Russian "daughter" of the Spanish company is called New Fashion.

However, as the FT has learned, the structure of the deal gives Inditex the right to immediately return to Russia in a franchise format if circumstances change.

In addition, Daher-controlled Mixed R DMCC, which was registered in September 2022 and now owns Russian operations, sells almost identical Inditex clothing, uses the same suppliers and former staff of the Spanish group.

Thus, the stores that once operated under the Zara brands only changed their names to Maag, Dub, Ecru, and Vilet.

Inditex said it was common practice in the industry for different retailers to use the same suppliers, and that it "actively ensures full exclusivity for all products sold by its brands."

According to the newspaper, Inditex invested more than 65 million euros in its Russian business before the sale, which goes against typical practice when companies try to withdraw money from a market they are leaving.

In addition, before completing the sale, Inditex wrote off a $120 million loan previously issued to a subsidiary in the Russian Federation.

According to the FT, products were arriving in Russia even before the deal was completed – more than 800 batches of clothing were sent from the Middle East to Russian stores.

• On March 15, The Bell reported that no major Western company plans to return to Russia.