PARIS — The Russian government has approved Zara parent company Inditex‘s bid to sell its business to UAE-based Daher Group.
Inditex shuttered its 514 stores in the country in February 2022, following the Russian invasion of Ukraine. The company announced its intent to transfer 245 stores to Daher Group last October, pending the approval of the country’s commission on foreign investments. Businesses from Western countries Russia deems “unfriendly” must receive the approval of the commission to sell their operations there.
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Daher created Fashion and More Management DMCC was created for the transaction. UAE is deemed a “friendly country,” which was key to the deal.
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The deal was approved by the commission March 30, and announced Wednesday by Russia’s deputy minister of industry and trade Viktor Evtukhov.
The new holding company has offices in a “friendly country,” Evtukhov noted.
“The group currently employs 4,200 people, and the representatives of the new owner confirmed they are keeping them,” Evtukhov said in the annoucnement.
The terms of the deal were not disclosed. Representatives for Inditex did not immediately respond to requests for comment.
When announcing the deal last October, Inditex said the new structure will allow a “substantial number” of jobs to be preserved, as the transaction includes the transfer of most store leases.
Some of the stores will open under new branding, including the names Maag, Dub, Ecru and Vilet as soon as this month, and will be totally different from Inditex’s stable, which includes Zara, Pull & Bear and Massimo Dutti.
Some of the requirements imposed by the government to achieve approval include selling the business at a minimum of a 50 percent discount and making a “voluntary contribution” to the Russian state.
Prior to closing its operations, Russia accounted for roughly 10 percent of Inditex’s global sales. The company took a write-down of 216 million euros related to closing stores in the first half of the 2022 fiscal year.