6 January 2024

The results of H&M after the resumption of work in Ukraine are better than expected, while the stores of the Inditex group (Zara, Bershka and others) remain closed.

The management of the H&M chain is impressed by the results of its chain operations after the resumption of its work in Ukraine - this was reported by Natalia Kravets - Commercial Director of Dragon Capital Property Management (Victoria Gardens, Sky Park, Smart Plaza Obolon, Piramida, Aladdin, etc.) - during the RAU Summit 2023, held in December 2023.

H&M stores were closed immediately after the beginning of the full-scale Russian invasion in February 2022, and began to gradually resume their operations starting from November 9, 2023.

Taking into account the general recovery of Ukrainian retail after the first shock of a full-scale Russian invasion into Ukraine in February 2022, its return to development already in 2023 (an example is the latest results of such chains as Comfy, Silpo, Eva), in fashion retail, in the absence of several large international players – such as H&M and brands of the Inditex group (Zara, Bershka and others) - their market share was redistributed among the other players.

For instance, during the first nine months of 2023, the Polish LPP (which includes the Reserved, House, Cropp, Mohito and Sinsay brands) more than doubled its sales in Ukraine compared to the corresponding figure in 2022.

Ukrainian brands, which are trying to occupy their niche in the absence of international giants, are also showing good results.

The dynamics of sales and profits of the Ukrainian branches of H&M and Inditex are shown in the graphs below:

Financial performance of H&M in Ukraine

It is interesting that with closed stores and paying employees wages, H&M was profitable in Ukraine in 2022 (partially due to financial profits - interest from deposits and other financial assets, more detailed financial information of H&M Ukraine is provided at the link).

Financial performance of Inditex Group (Zara) in Ukraine

According to our expectations, the company's loss in 2023 will amount to no less than UAH 300-400 million (more about the financial performance of Inditex group in Ukraine - see the link).