According to the Russian “Kommersant” report on October 18, according to court documents and sources in September, Zara parent company and Spanish fast fashion giant Inditex Group is considering transferring its assets in Russia to “friendly” countries one’s business Patner.
According to reports, these partners may come from Southeast Asia or the Persian Gulf, a move that may allow Zara to continue operating in Russia. A source in the fashion retail industry noted that Inditex’s Russian assets may be transferred to a partner in the United Arab Emirates.
According to an anonymous source, some of Inditex’s brands, such as Massimo Dutti, Oysho and Zara Home, may leave the Russian market completely, while the remaining brands will continue to operate under other names.
According to reports, Polish retailer LPP previously maintained its operations in Russia through a similar plan in July this year. The company transferred the Russian stores to a company registered in the United Arab Emirates. Meanwhile, the fashion group’s stores have resumed operations after changing their names.
According to the Inditex Group’s financial report, in the first half of 2022, that is, the six months ended July 31, Inditex’s sales increased by 24.5% year-on-year to 14.8 billion euros, of which the sales of core brands Zara and Zara Home soared 29 % to 10.927 billion euros, and overall net profit surged 41% to 1.8 billion euros.
A UBS research report shows that since January this year, the initial price of Zara products has increased by 10% or more every month compared with a year ago, and the initial price increase in April reached 18.5%, approaching 20% .
Having fully tasted the “sweetness”, price increases have become Zara’s “habitual action”. A UBS research report stated that in July this year, the average price of Zara clothing products increased by 12.2% year-on-year, which is higher than the inflation level in many markets around the world.
Some time ago, at the financial report meeting for the first half of 2022, Inditex executives bluntly stated that they would continue to raise prices this fall. Group Chief Financial Officer Ignacio Fernandez said that the average price will further increase by about 5%.
Keywords:
Russia Textile Industry Operations
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