German fashion house Hugo Boss has completed the divesture of its Russian business to its wholesale partner Stockmann.
The two companies reached an agreement for the deal in April 2024.
According to Russian news agency Interfax, the transaction was recorded in the Unified State Register of Legal Entities on 2 August.
Hugo Boss was quoted by Reuters as saying;
“We can confirm that our Russian subsidiary has been sold to Stockmann JSC – a company belonging to one of Hugo Boss’s long-standing wholesale partners in the country.”
The government subcommission for foreign investment had greenlit the sale of Hugo Boss to Stockmann, as reported by Interfax, which cited Russia Deputy Industry and Trade Minister Viktor Yevtukhov’s statement in the spring of 2024.
It is anticipated that the retailer’s stores in Russia will reopen in the third quarter of the year following the completion of the deal.
Financial details of the transaction have not been disclosed. It is known that Russia requires foreign entities to sell their assets at a minimum discount of 50%.
The move comes after Hugo Boss halted its retail activities in Russia in March 2022, in response to the invasion of Ukraine.
The suspension included a halt to e-commerce activities and advertising within the Russian market, as reported by Reuters.
According to Russia’s corporate database, Stockmann now owns 100% of Hugo Boss Rus, which is valued at Rbs40m ($470,588).
Hugo Boss faced criticism for continuing to supply goods to Russia from groups such as B4Ukraine, a coalition urging Western companies to cut ties.
“In terms of our wholesale business, we were fulfilling the contractual obligations to our partners. In this context, Hugo Boss is and has been complying with existing EU sanctions at all times,” Hugo Boss stated in April 2024.
“Hugo Boss completes divesture of Russian business to Stockmann” was originally created and published by Retail Insight Network, a GlobalData owned brand.
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