H&M quits Russia citing ‘unpredictable future’

H&M has said the closure of its Russian stores has resulted in a sales slowdown (Mike Egerton/PA) (PA Archive)

Swedish high street retailer H&M is to withdraw operations from Russia, the company has announced, becoming the latest multinational business to fully exit the country.

The world’s second largest fashion retailer said “current operational challenges and an unpredictable future” were responsible for the decision to wind down the company. H&M said stores would re-open temporarily in a bid to sell remaining stock.

It comes after the company paused all sales in Russia, Ukraine and Belarus in March following the invasion of Ukraine.

The announcement follows decisions by a number of global brands to pull out of Russia amid political pressure to cut ties with the country. In May, burger chain McDonald’s decided to sell all its restaurants in Russia, while French carmaker Renault said it would sell its stake in Russia’s biggest carmaker, Avtovaz.

H&M CEO Helena Hemersson said: “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.”

Sales in Russia accounted for 4% of the H&M’s total revenues of 199 billion krona (£16 billion), according to the company’s most recent annual report. The fashion firm said it expected the move would cause the company to take a third-quarter hit of two billion krona (£161 million). Shares fell 0.7% on the news.

As of November 2021, H&M employed 6,910 people in Russia across 168 stores. The company said it would “support all colleagues concerned in the best possible way over the coming months.”