Bags / Shoes & Accessories

On July 18, the world-renowned brand H&M announced its official withdrawal from the Russian market. As early as after the Russian-Ukrainian conflict, the company suspended all local sales activities in March.

Helena Helmersson, chief executive of H&M Group, said in a statement: "After careful consideration, we believe that it is impossible to continue operating in Russia under the current circumstances."

"We are deeply saddened by the impact this will have on our colleagues and are very grateful for their hard work and dedication. In addition, we would like to thank our customers for their support over the years."

"We are deeply saddened by our colleagues who have been affected, and we are grateful for their hard work and selfless dedication," Hemerson said.

H&M, which began operating in Russia in 2009, will reopen local stores "to clear inventory within a limited time" as part of the withdrawal process.

H&M pointed out that the entire withdrawal process is expected to cost 2 billion Swedish kronor (about 1.3 billion yuan), of which about 1 billion will have an impact on the group's cash flow. "The total cost will be considered a one-time cost and will be included in third-quarter 2022 results," the company said.

Unprecedented sanctions and massive withdrawal of foreign companies

The Russian-Ukrainian conflict brought unprecedented sanctions and led to the withdrawal of a large number of foreign companies, including Starbucks and McDonald's.

Swedish network equipment maker Ericsson announced in April that it would suspend all operations in Russia indefinitely; Volvo's truck manufacturing unit also suspends local sales and production at its Kaluga plant.

Shipping giant AP Moller-Maersk made what it said was its last cargo operation at a Russian port in early May, losing $718 million on the way out of the country. The logistics giant is currently selling its nearly 31 percent stake in Global Ports Investments (GPI), which owns six terminals in Russia and two in Finland.

TJX exited the market entirely after divesting its 25% stake in Russian clothing retailer Familia.

Those companies' decisions, along with similar exits by U.S. businesses such as McDonald's and tech giant Cisco, are now bringing other companies into focus that might do the same. Global fashion companies including Levi Strauss, H&M rival Inditex, LVMH, Adidas, Gap Inc. and others have temporarily halted operations in the country, but have not said they will leave Russia forever.

For Inditex, which owns Zara, Pull & Bear and Massimo Dutti, CEO Oscar Garcia Maceiras recently told shareholders that it will continue to monitor the situation in Russia and temporarily suspend operations.

Before the market shutdown, Inditex's sales in Russia and Ukraine accounted for about 5 percent of sales growth, the company said. As of March, Inditex operated 502 stores in Russia and 84 in Ukraine before closing stores.