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H&M

Swedish clothes giant H&M to wind down Russian business

Swedish fashion retailer H&M said on Monday it had decided to wind down operations in Russia, after pausing all sales there in March following Moscow's invasion of Ukraine.

Swedish clothes giant H&M to wind down Russian business
A woman walks past the closed H&M in March 2022. Photo: Kirill Kudryavtsev/AFP)

The company cited “current operational challenges and an unpredictable future” as the basis for the decision.

“After careful consideration, we see it as impossible given the current situation to continue our business in Russia,” H&M Group CEO Helena Helmersson said in a statement.

“We are deeply saddened about the impact this will have on our colleagues and very grateful for all their hard work and dedication,” she added.

H&M, which has about 6,000 employees in Russia and has operated in the country since 2009, said it would reopen stores in Russia “for a limited period of time to sell remaining inventory” as part of the exit process.

It said the entire wind-down was expected to cost the group around 2.0 billion Swedish kronor ($192 million), of which around 1.0 billion would have
a cash flow impact.

“The full amount will be included as one-time costs in the results for the third quarter 2022,” the company said.

Despite stopping sales in Russia, Ukraine and Belarus, H&M’s sales surged 17 percent to 54.5 billion between March and May compared to the same period a year earlier, while net profit soared by 33 percent to 3.7 billion.

The Russian invasion of Ukraine triggered unprecedented sanctions and an exodus of foreign corporations, including Starbucks and McDonalds, and several large Nordic companies.

In June, furniture giant Ikea said it would “scale down” its activities in Russia and Belarus. They had been suspended since early March.

Swedish network equipment maker Ericsson announced in April it would suspend all Russian operations “indefinitely”, while truck maker Volvo has
stopped sales and halted production at its Kaluga plant.

Denmark’s Lego, the world’s largest toymaker, announced earlier in July that it would “indefinitely cease commercial operations” in Russia, ending its
partnership with the retail group that operated 81 stores on the brand’s behalf.

In early May, Russia placed Lego products on a list of goods that could be imported without the agreement of the intellectual property owner, in order to
bypass restrictions imposed over the conflict in Ukraine.

Among the list published by the industry and commerce ministry were Apple and Samsung smartphones, major car brands, game consoles and spare parts used in various industries.

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SAS

SAS strike affected 380,000 passengers in July

More than 3,700 flights where cancelled and 380,000 passengers where affected by the 15-day strike which hit Scandinavia's SAS airline last month, the company has revealed.

SAS strike affected 380,000 passengers in July

“We sincerely apologize to our customers who were affected by the July strike,” Anko van der Werff, the company’s chief executive, said in a press release. “We are happy operations returned to normality again allowing us to start regaining our customers’ trust.”

According to the release, 1.3 million passengers travelled with the airline in July, which was still a 23 percent increase on the same month last year, when Covid-19 restrictions were still reducing tourism levels.

“In comparison with last month, the total number of passengers decreased with 32 percent and capacity was decreased by 23 percent, which was a result from the 15-day pilot strike,” the release read. 

Pilot unions in Sweden, Denmark and Norway, went on strike for 15 days last month over pay, conditions, and the company’s refusal to rehire pilots laid off during the Covid-19 pandemic on the same terms as before. 

The strike, which cost the airline between €9m and €12m a day, was ended on July 19th, after which it took several days to get flights back to normal

Van der Werff said company said it would now continue putting in place its restructuring plan, SAS FORWARD, and push ahead with restructuring in the US, where the company has filed for Chapter 11. 

He said these would both “accelerate the transformation process that will lead to a financially stable airline, that will be able to deliver the service our customers are expecting”. 

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