Zara returns to Ukraine after a two-year closure

Zara will return to Ukraine - the favorite brand of many Ukrainians, which closed its stores due to the war two years ago.

The British newspaper Financial Times reported this, describing the event as "a landmark moment that underscores a fragile new normal in several cities" even as the war with Russia continues.

The Spanish company Inditex, owner of the Zara, Pull & Bear, OYSHO, Massimo Dutti and Bershka brands, has told local landlords that it will start opening its stores in Ukraine again in early April.

Inditex closed all 84 of its stores in Ukraine on February 24, 2022, the day of the full-scale invasion of Russia.

Since then, the company stopped shipping goods to Ukraine, but continued to pay taxes and pay salaries to its 1,000 Ukrainian workers, even though most of them were at home without any work. Inditex maintained leases with the landlords during the store closures, but did not disclose on what terms.

For almost two years, the stores stood empty, turning into "black holes" or "time capsules" in Ukrainian shopping centers, on the lowered shutters of which you can still see advertisements relevant for the beginning of February 2022.

Now the Spanish group, which has approximately 5,700 stores in more than 90 countries, will gradually resume operations in Ukraine, starting with 20 stores, including three Zara outlets in Kyiv.

In total, the number of stores across the country will eventually increase to 50, but Inditex cannot say how long this process will take, writes the FT. The priority is the safety of employees, and the situation will show further, the company emphasizes.

Some Ukrainian workers have already been sent to study in Poland to prepare for returning to work, the publication writes.

34 Inditex stores in the south and east of Ukraine, which were most affected by the war, will remain closed. The Ukrainian government prohibits commercial activity there.

"At last"

The Spanish retailer, the world's largest fashion group by sales volume, is the most important global retailer to return to Ukraine. But at the same time, he is one of the last, for which he was half-jokingly reprimanded in Ukrainian social networks.

"Well, they finally realized that in a country where bookstores open every day, people will definitely buy underpants," journalist Olga Dukhnich wrote on Facebook.

"Now we are waiting for IKEA," other users write.

Many shops, restaurants and bars began to gradually open their doors in the spring of 2022.

In August 2022, causing a euphoria of positive emotions, McDonald's returned to Ukrainian cities, and in November 2023 - H&M, another favorite brand of Ukrainians, which had 8 stores in the country before the war.

Polish clothing retailer Greenpoint announced last October that it will open 20 of its stores abroad for the first time, and they will be in Ukraine - Kyiv and some cities in the west of the country.

Inditex says it made the decision to open after being asked for months by Ukrainian media and retailers about when it would happen.

But most likely, negotiations with Ukrainian diplomats were not possible.

After the H&M brand announced its return, Foreign Minister Dmytro Kuleba said that the Ministry of Foreign Affairs was working to bring back IKEA, H&M and Zara, among other brands.

He mentioned that McDonald's managed to return to Ukraine after his telephone conversation with US Secretary of State Anthony Blinken.

The Ukrainian authorities consider each such return as a signal to investors that, despite the circumstances, it is possible to work in Ukraine.

Life in Kyiv may seem normal, with people queuing to buy dresses and bars often full, writes the FT, but also "many Ukrainians are struggling with financial and psychological problems related to the war." Missile attacks occur periodically, and the air raid warning signal, during which shopping centers are forced to close, can sound several times a day.

According to a study published by the Association of Retailers of Ukraine, the revenue of retail chains fell from $37 billion in 2021 to $30 billion in 2022, even assuming inflation of 26%.

"Occupation of large territories, looting, shelling of peaceful towns, constant air raids and blackouts have hit retailers hard. However, even in the most difficult conditions, retailers managed to adapt," the trade union noted.

Inditex also left Russia, once its second-biggest market by number of stores after Spain, selling about half of its 500 stores to the UAE-based Daher Group and closing the rest.

But the Spanish retailer still kept the possibility to return to Russia if "the situation changes".