Russia seems to be expected to return the Spanish fashion group Inditex in its shopping streets. This is indicated by a report by the Parliamentskaja Gaseta, the official organ of the Russian parliament. The article speaks of “informal negotiations”, which Inditex already leads to offer its brands again soon on the Russian market.
The article, which was published in the Russian state medium of Parliamentskaja Gaseta at the end of April, was to be understood in response to the growing expectations in the country with regard to a possible return of Ikea. Previously, it had become known that the Swedish furniture and furnishing company had submitted the necessary documents to register its brand for 18 product and service categories. This registration, which is valid by 2033, was assessed by various analyst: inside and experts from the Russian retail sector as a signal for an “immediate return” of Ikeas on the Russian market.
Pavel Luilin, Vice President of the Union of Russia, Belarus and Kazakhstan’s shopping centers (SCA), contradicted this assessment of the Parliamentskaja Gaseta. At the same time, he revealed that advanced “informal negotiations” are underway – both with the Spanish company Inditex and with the Japanese fashion group Unqlo – to enable their business in Russia.
Luilin emphasized that Ikea primarily wanted to protect his own name with the brand registration – in particular to prevent a competing local chain from being created under the name Ikea. This new chain was to fill the gap that was created after Ikeas’s withdrawal in March 2022. In the course of this withdrawal, the group initiated a consistent disinvestment process until November 2024, which led to the sale of all assets in the Russian Federation. This included four factories, 14 shopping centers and a large logistics store that went over to Russian companies and investors: inside.
However, this withdrawal corresponded to none of the three scenarios defined by the Kremlin for foreign companies that were active in the country before the beginning of the Russian war of aggression against Ukraine: continuation of business, transfer to local partners or complete liquidation with the workforce of the workforce. Luilin referred to the risks that could result in IKEA and recalled the case of the Swedish telecommunications company Ericsson. This was the first foreign company affected by a forced brand appropriation procedure – a dangerous precedent that Ikea tries to avoid brand registration. However, the Russian authorities could block this attempt.
Whether Luilin’s statements about the Parliamentskaja Gaseta, according to which the registration is not an actual return – among other things, because the purchasing centers used by Ikea have already been otherwise occupied and there is currently no space for the company’s business model – as a realistic assessment or rather as a warning, remains open. It is also possible that they serve to force Ikeas greater commitment to return to the market in order to prevent the group from losing its trademark rights similar to Ericsson.
Highest expectations in view of the return of the brands of Inditex
Although the Vice President of the SCA emphasized in his explanations to the Parliamentskaja Gaseta that the brands and companies of the West, who have hired their activities in Russia after the war in Ukraine, including Inditex, need a “trigger” to enable their return, probably only partially, the international sanctions against cross -border payments, has the “informal information Negotiations ”and the statement that the process for the return of the brands of Inditex would be“ faster ”, awakened in all of Russia to the announced return of Zara, Bershka, Pull & Bear and other brands of the group.
“We will cool down the large wave of massive ‘Clickbait’ messages about the alleged return of Zara, Bershka, Pull & Bear and Uniqlo this year,” said the Vice President of the SCA and criticized the “very daring” headlines that were created in Russia and outside of Russia based on its statements and the information published by the Parliamenteta gaseta. He emphasized that for the return of international brands such as Zara or Uniqlo, the necessary conditions must be given in both Russia and in their countries of origin in order to enable this return.
These conditions are currently not given and would only arise when the first sanctions are lifted. As a second point, Luilin again pointed out that it will take about a year for the companies to be able to adapt their processes in terms of production, purchasing, opening offices and shops again before they can resume their activities in Russia. In some cases, as with Inditex, this process would be “a little shorter, but not much” shorter.
After he had highlighted these two main points again, the Vice President of the SCA particularly emphasized cases such as Ikea or the Finnish hypermarket chain Prisma, which, due to the special features of their large -scale retail model, have to tackle complicated construction projects, which makes it more difficult, if not slower, talk about their possible return to Russia.
In conclusion, he pointed out a not inconsiderable question, namely the growing Russian retail industry that filled the gap that the international companies left after their abrupt exit in 2022. These retail companies are now skeptical and reserved for the possible return of the large international brands, a process for which the Kremlin has already confirmed its position, according to which he wants to guarantee conditions at any time that are particularly favorable for Russia and “allied” companies, which are now priority in business activities on the Russian market.
A possible return in the franchise contracts
Inditex has neither confirmed nor denied “informal negotiations” about the possible return of its fashion brands to Russia and is limited to pointing out that there is no news about the company’s position in the country since Inditex has therefore agreed to sell its business in Russia to the emiratic group based in Dubai.
After Inditex announced on March 5, 2022 to “temporarily” stop the activities of his then 502 branches in Russia-which made 8.5 percent of the group profit and Russia made the second largest market in Spain at the end of the financial year 2020, both with regard to the sales area and the business volume-the Spanish fashion company agreed to sell its Russia business to the group. The aim of this decision was to receive a “essential part” of the jobs because it was planned to transfer the majority of the sales areas used by Inditex brands to the new owners. From then on, these should be operated under the own brands of the sincerely group, which-like Inditex emphasized-“in no way connected to the Spanish company”.
In a message sent to the Spanish stock exchange supervisory authority CNMV on October 25, 2022, Inditex also showed how a possible return of the company to the Russian Federation could be designed. The prerequisite for this is the occurrence of corresponding framework conditions, which, according to Inditex, would enable a “return of the brands of the group”. In this case, a fundamental agreement had already been made with the therefore group. This stipulates that the Emiratic company could act as a franchise partner of Inditex and its brands in Russia in the future. Such an agreement would make it easier to shorten the lead times of around a year mentioned by Pavel Luilin, which in his opinion need international companies to resume their activities on the Russian market.
This article was used with digital tools translated.
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