The world's second-largest fashion retailer, H&M, decided to close its business and officially exit the Russian market following Moscow's invasion of Ukraine early last year.
It indirectly adds to the list of foreign companies that have acted to block or cut off supplies to Russia since the Vladimir Putin-led government invaded Ukraine in February.
H&M Chief Executive Helena Helmersson commented that the company decided to leave the Russian market after making a decision stating that it was impossible for them to continue doing business there.
Previously H&M decided to temporarily suspend business in Russia like several other companies.
According to sources, Russia is H&M’s 6th largest market and the company is increasing the number of its stores while reducing physical stores in most other markets.
In addition, H&M is also said to have opened its physical store temporarily for a limited period to sell the remaining inventory in Russia.
Meanwhile, the cost of closing H&M in Russia is said to have cost 2 billion Swedish Crowns or around $ 191.3 million with 1 billion Crowns affecting cash flow.
The amount will be included as a cost in the company's report results for the third quarter.
On the other hand, H&M recorded strong profits and sales beyond expectations for the 2nd quarter.
The company’s net income jumped 33% to 3.7 billion Crowns or $ 364 million while sales jumped 17% to 54.5 billion Crowns even as the company suspended operations in Russia at the time.
The report was released on June 29.
