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27 May, 2023 14:40

US clothing giant expanding in Russia – media

Guess is consolidating its business in the country, Kommersant reports
US clothing giant expanding in Russia – media

American fashion brand Guess has reacquired its stake from a Russian partner in what experts have described as an unusual deal for the fashion market in the sanctioned country, Kommersant reported on Thursday.  

The clothing manufacturer and retailer reportedly bought back its 30% share from local partner Vyacheslav Shikulov for €8 million ($8.5 million), and has consolidated 100% of its Russian business after the deal was approved by the US Treasury Department.   

At the end of 2015, the parties signed a ‘put option’ agreement which provided Shikulov with the right to sell his 30% stake in local business and obliged the American company to buy out his share by December 31, 2025.   

Shikulov exercised the option in November 2022, and Guess applied for permission to conduct a buyback to the Office of Foreign Assets Control of the US Department of the Treasury (OFAC).   

The move by the US clothing giant is atypical for the current market environment as the vast majority of Western companies exiting Russia are seeking to sell their assets to local investors, industry experts pointed out. The deal could reflect the retailer’s concerns over continuing its Russian operations, they added.   

In 2022, Guess’s revenue in Russia increased by 24% to 4 billion rubles ($49.9 million), data showed.  

Numerous foreign brands and businesses have left Russia over the past year following increasing pressure from their governments, with many suffering major losses on exiting the country. 

Earlier in May, Japanese casual wear retailer Uniqlo decided to sell most of its stores in Russia after suffering multimillion-dollar losses. Last year, Swedish clothing brand H&M lost some $363 million, while Spanish clothing conglomerate Inditex – the owner of brands such as Zara, Bershka, and Massimo Dutti – faced about $300 million in losses. French sporting goods retailer Decathlon lost around $140 million, while luxury Italian retailer Moncler and French counterpart Hermes jointly lost around $200 million.

For more stories on economy & finance visit RT's business section

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