by business-standard.com — Zara owner Inditex has reached an agreement to sell its Russian business to a Lebanese retail and real estate conglomerate, the Spanish fashion giant said on Tuesday in a statement to the country’s competition authorities. The buyer is Daher Group and the potential purchase is pending approval from Russian authorities, Inditex said, without disclosing financial details.
Inditex halted its business in Russia on March 5, shortly after Russian President Vladimir Putin ordered the invasion of Ukraine at the end of February. Following other western brands, the fashion retailer closed its 502 shops and stopped online sales. Tuesday’s announcement marks the end of Inditex’s business in Russia, although the retailer said it would consider returning through a franchise collaboration with Daher if market circumstances changed. The statement to CNMC, the commission that oversees competition in Spain, made no direct reference to the war in Ukraine. The sale agreement includes the transfer of most of the lease contracts of its existing stores, which Inditex says will enable the preservation of a substantial number of jobs generated by the group. Founded in 1975 by Amancio Ortega, Inditex’ rapid success hinged on the ability to serve new fashion collections in record time. It currently operates several brands globally, including Massimo Dutti, Bershka, Pull & Bear and Oysho.
About Daher Group
The Lebanese Daher family have become billionaires by opening 55 fashion and lifestyle brands in 14 countries in the Middle East and North Africa. The Daher brothers — Wassim, Said, and Hasan — own Azadea Group, a Beirut-based company that own and manage 600 retail outlets, including Max Mara, Sunglass Hut, Massimo Dutti, and Zara, among others. Azadea’s largest collection of stores are in mega malls in the United Arab Emirates, which is the company’s most profitable country, according to a former Azadea senior executive. The company employs 11,000 people and the brothers are estimated to have a fortune of at least $1.4 billion, according to the Bloomberg Billionaires Index. Wassim Daher founded the company in 1978 as a multi-brand clothing store in Hamra Beirut. His brother Hasan and Said later joined the company as managing director and chief executive, respectively.
Said Daher says the company grew rapidly when it began exclusively purchasing and opening “already-successful” franchises in the Middle East. “You can grow much faster as a franchise than if you’re operating your own brand. With a franchise, you’re implementing already-successful business models,” he told Beirut-based Executive Magazine in a 2005 interview. “Why bother establishing a vertically integrated business model which will take you years and years to perfect when you can get involved at the end of the supply chain and start opening outlets in promising markets in a matter of months?”
In 2011, the Daher brothers opened the Azadea Foundation, an environmental NGO in Lebanon, which is financed exclusively by Azadea board members and employees. The Azadea Foundation is credited with the restoration of the 107-year-old René Mouawad Sanayeh Garden, the city’s biggest 22,000 square meter public garden, which underwent a $2.5 million makeover.
Azadea Foundation also planted over 8,500 trees in three plantation projects in the woodlands of Lebanon. The group plans to spread environmental awareness in school workshops and “Green Booths” in Beirut malls.
