Mango to abandon direct sales in Russia after 23 years due to the war

Fashion company Mango has decided to definitively abandon direct sales in Russia after 23 years operating in the country, and is handing over its stores to its franchisees "in view of the uncertainty regarding the evolution of the geopolitical situation" following the invasion of Ukraine.

As reported by 'El País' and confirmed by the company in a statement, in order to "guarantee coverage" to its 800 employees in Russia, Mango will cease to operate directly in the country and has reached an agreement with several of its franchise partners to divest its business to them.

Last March, as a result of the war in Ukraine, Mango decided to temporarily suspend its operations in Russia, leaving the 55 stores it owns in the country -another 65 are franchises- and the online sales platform without activity.

According to the company, from the very beginning its "priority" has been "to ensure the safety of its teams in Ukraine and Russia and its distribution network, of which local franchises and partners are an essential part."

Over the next few months, Mango, which is present in 110 markets around the world, will hand over its current stores to different franchise partners.

According to the fashion company, which has made a 20 million provision to cover the impact of the situation in Russia, the first two points-of-sale will be sold next week, with a further 22 expected to be added between this month and the following month.

By the end of 2021, Russia accounted for 8% of Mango's EBIT - earnings before interest and taxes - and was among the company's five largest markets.

After analyzing the security protocols, Mango, which last February temporarily closed its 14 stores in Ukraine, is gradually reopening its stores in the country in areas far from the war, and in response to requests from both its franchisees and its direct local teams.

Nine stores have reopened, four of which are company-owned and five franchised, and in the coming weeks, activity will resume in other points-of-sale.

The company stressed that since the start of the war, Mango has provided coverage to its teams in both Ukraine and Russia, continuing to pay their salaries and providing them with all the legal coverage they have needed.

In addition, the company offered legal advice and a new job in another country to employees and partners who decided to leave Ukraine after the invasion