Hugo Boss Sells Russian Business to Stockmann JSC, Preserving Jobs

Hugo Boss sells Russian business to local retailer, preserving jobs; stores to reopen in Q3 2024 after legal procedures, highlighting challenges for foreign firms in Russia amid sanctions.

author-image
Shivani Chauhan
Updated On
New Update
Hugo Boss Sells Russian Business to Stockmann JSC, Preserving Jobs

Hugo Boss Sells Russian Business to Stockmann JSC, Preserving Jobs

The Russian government has approved the sale of German fashion brand Hugo Boss's Russian business to the Stockmann JSC retailer. The deal will preserve all jobs, and the stores are expected to reopen in the third quarter of 2024 after the necessary legal procedures.

Hugo Boss had temporarily suspended its retail operations in Russia shortly after the country's military invasion of Ukraine in February 2022. The company also paused its e-commerce activities and stopped advertising in the Russian market at that time.

Deputy Minister of Industry and Trade Viktor Yevtukhov confirmed the government commission's approval of the sale. He stated that one of the conditions of the deal was the preservation of all jobs at Hugo Boss's Russian subsidiary.

Hugo Boss said it had not violated any Western sanctions as it continued parts of its wholesale business in Russia until now. However, the company likely took a financial loss due to Russian government rules requiring foreign companies to sell assets at discounts of at least 50%.

Why this matters: The sale of Hugo Boss's Russian business to a local retailer highlights the challenges faced by international companies operating in Russia amidst geopolitical tensions and sanctions. It also emphasizes the Russian government's efforts to maintain employment and economic stability by facilitating such transactions.

The reopening of Hugo Boss stores under Stockmann JSC's ownership in the third quarter of 2024 will mark a new chapter for the brand's presence in the Russian market. "The deal will preserve all jobs, and the stores are set to reopen in Q3 2024 after legal procedures," Deputy Minister Yevtukhov said, stressing the government's focus on maintaining employment in the sector.

Key Takeaways

  • Russia approves sale of Hugo Boss's Russian business to Stockmann JSC retailer.
  • Deal preserves all jobs, with stores expected to reopen in Q3 2024.
  • Hugo Boss had suspended retail operations in Russia after Ukraine invasion in 2022.
  • Hugo Boss likely took financial loss due to Russian rules on asset sales at discounts.
  • Sale highlights challenges for international firms in Russia amid sanctions and tensions.