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Inditex to acquire Zara Russia for €41.5m

Jan '06
Industria de Diseno Textil SA (Inditex) has reached an agreement with the Finnish retailing Group Stockmann to buy its 100 percent stake in Zara Russia. The purchase price is €41.5 million minus debt. This company is currently in charge of operating the Zara chain of stores in Russia under the franchise agreement subscribed between Inditex and Stockmann.

The final agreement is expected to be reached by May 31st 2006, subject to the approval of the Russian Antitrust Authorities and further to the usual due diligence process.

At present, Zara has six outlets in Russia, all of them in the Moscow area and seven more are expected in 2006. Expansion will continue both in Moscow and in the rest of Russia, which is seen as a high potential market.

Isla, Deputy Chairman and CEO of Inditex, has expressed his satisfaction at having reached the agreement and has declared that "these are arguably, very good news, that will allow the Group, not only to increase Zara's expansion, with the launching of seven new stores in 2006, but also to accelerate the pace of the other formats of the Group in Russia through this new subsidiary."

Inditex began operating in Russia in 2003, through a franchise agreement subscribed with Stockmann, the first European retailer to enter the Russian market. Stockmann is also Zara's franchisee in Finland.

After the opening in February 2003 of the first Zara store at Mega Mall in Moscow, the chain has launched two new stores in 2004 and three in 2005, among them a flagship store located in Tverskaia Street, central Moscow, which opened in June 2005.

Inditex SA is one of the worlds largest fashion distributors, with eight sales formats -Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home y Kiddy's Class- boasting 2.693 stores in 61 countries.

Inditex SA

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