PARIS — H&M Group will wind down its business in Russia, the company said on Monday.
“After careful consideration, we see it as impossible given the current situation to continue our business in Russia. We are deeply saddened about the impact this will have on our colleagues and very grateful for all their hard work and dedication. Furthermore, we wish to thank our customers for their support throughout the years,” chief executive officer Helena Helmersson said in a statement.
The move to exit Russia comes four months after it paused operations there in response to Russian president Vladimir Putin’s invasion of Ukraine and the subsequent international sanctions. The group cited “current operational challenges and an unpredictable future” in reaching the decision.
The move is anticipated to cost the group about 2 billion Swedish kronor, or $191.3 million. Offset by exchange rate gains, roughly half will have an immediate impact on its cash flow. The group will include the amount as a one-time cost in the upcoming third-quarter results, due to be published on Sept. 15.
Stores will be temporarily reopened for a limited time to offload existing inventory, the company added. H&M has operated in the country since 2009, currently counting about 170 physical stores and roughly 6,000 employees.
H&M reported strong sales, up 12 percent in local currencies, in the second fiscal quarter compared with the same period a year ago in results released June 15, despite the pause in Russian sales.
“The company regrets that the business cannot continue under the current circumstances and that many colleagues are affected as a consequence. The focus now is to ensure a responsible wind down of operations and support all colleagues concerned in the best possible way over the coming months,” the group added.
The group plans to expand in South American and Asia in the coming months.