Zara, the flagship brand of Spanish retail giant Inditex, is gearing up to reopen its stores in Ukraine, marking a significant milestone in the gradual return to normalcy amidst the ongoing conflict with Russia. The reopening, scheduled for early April, comes after nearly two years of closure due to the war, which turned these once vibrant shopping destinations into desolate spots in bustling centers across the country.
Inditex, acknowledging the importance of Ukraine in its global retail strategy, has informed local landlords of its plans to reopen its shops. Zara, known for its presence as a prime attraction in many malls across Ukraine, stands as a symbol of resilience in the face of adversity. However, it is among the last major retailers to resume operations in the country.
The process of recovery began in the spring of 2022, with gradual reopenings of various retail establishments, restaurants, and bars. H&M, having eight stores in Ukraine before the conflict, resumed operations in November 2023, signaling a gradual return of international brands. Similarly, Greenpoint, a Polish fashion retailer, announced its plans to invest in Ukraine, aiming to open 20 stores in Kyiv and other western cities.
Inditex intends to reopen 50 of its 80-plus stores across Ukraine, prioritizing safety and flexibility in its approach. Despite the semblance of normalcy in cities like Kyiv, where shoppers queue up for dresses and bars bustle with patrons, many Ukrainians continue to grapple with financial and mental health challenges stemming from the war.
The impact of the conflict on the retail sector has been profound, with revenues plummeting from $37 billion before the war to $30 billion in 2022, despite inflation running high at 26 percent. The Retail Association of Ukraine highlighted the challenges faced by retailers, including occupation, looting, and constant security threats, while commending their resilience in adapting to adversity.
Inditex’s decision to close its 84 stores in Ukraine on February 24, 2022, coinciding with Russia’s full-scale invasion, was a strategic move to ensure the safety of its employees and customers. Despite the closures, the company continued to fulfill its financial obligations, paying taxes and wages to its 1,000 Ukrainian employees.
As part of its reopening strategy, Inditex plans to gradually reopen stores, starting with 20 locations in Kyiv shopping centers. However, 34 shops in parts of south and east Ukraine directly affected by the conflict will remain closed, in compliance with government regulations.
In addition to Ukraine, Inditex made significant decisions regarding its presence in Russia, once its second-largest market. The company sold roughly half of its 500-odd stores in Russia to the Daher Group of the United Arab Emirates and closed the rest. Nevertheless, it has retained the option to re-enter the Russian market in the future, contingent upon changing circumstances.
As the world watches the unfolding events in Ukraine and their implications for global commerce, the reopening of Zara stores serves as a testament to resilience, adaptation, and the enduring spirit of commerce amidst adversity. Inditex’s commitment to Ukraine underscores the importance of the country as a strategic market, even in challenging times.
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