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The CEO of Inditex declared that the conditions for Zara owners to return to Russia were “certainly not” more than two years after they sold their local business after the invasion of Ukraine.
Asked what the right situation would be for the group to re-enter the market, Óscar García Maceiras told the Financial Times: “Of course, it’s not the current environment.”
Garcia Matheilas’ comments are the latest indication that multinationals are not in a hurry to return to the Russian market despite a declaration by the Russian main investment envoy that the previous declaration by the Russian main investment envoy will return by June this year.
International companies that have left Russia would be better off returning than Inditex, which previously counted the country as the largest market outside of Spain.
In early 2023, it sealed a contract to sell Russian business for “not significant” sums to members of the Lebanese family that operates the Spanish group’s franchise in the Middle East.
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However, terms of sale included obligations to the so-called Darher Group to “immediately” establish Inditex’s Russian franchise agreement with the transferred store if the Spanish company returned.
FT reported this year that Maag, a brand founded by Inditex’s Russian business buyers, is selling almost the same product to Zara, and that the new owner relies on the same supplier as its predecessor.
García Maceiras said there are “several suppliers” in the apparel market. “We have suppliers who work for us. We never look for exclusive suppliers. They work for us.
Regarding product similarities, he said: “This is a sector where trends are ultimately global trends. You can absolutely identify what trends are through other players’ websites. It’s part of everyday life.”
García Maceiras said the decision to return to Russia would “just remain in a more favorable geopolitical environment.” But at this point, the conditions are certainly not correct.”
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Russia’s deputy finance minister Ivan Chebeskov told domestic news outlet RBC this week that the Western group had asked to return to the Russian market. “At this point, we haven’t seen any requests from companies that have left,” Chebeskov said. Instead, the country was seeing “dozens” demands for businesses that were still about to leave, he said.
Earlier this year, Vladimir Putin ordered the government to look into the conditions for Western companies to return, but the Russian president and top officials have increasingly shown that they are not eager to return, and may actually block them from doing so.
In May, Russian lawmakers introduced a law that allowed domestic companies to break buyback agreements with Western companies if the price that was previously matched with the 2022 full-scale Ukrainian invasion fell below the present value of the asset.
Meanwhile, Russian companies have seen an increase in the number of government-approved budgets.
The Moscow Court of Arbitration ruled this week in favor of the forced nationalization of Domodedovo.
