Swedish retail giant Hennes & Mauritz (H&M) will start winding down its operations in Russia, having halted all sales in the country in March after Russia’s attack on Ukraine.

The Stockholm-based company expects to book costs of Skr2billion (€190 million) from the process, of which about one billion will have a cash-flow impact, it said in a statement. The group plans to reopen physical stores in Russia for a limited period of time to sell remaining inventory.

“After careful consideration, we see it as impossible given the current situation to continue our business in Russia, chief executive Helena Helmersson said.

H&M’s Russian business accounted for about 4 per cent of its SKr199 billion in sales during the last financial year. The company has operated in the country since 2009. In March, H&M’s head of investor relations, Nils Vinge, said it was “no secret” that Russia was one of the most important growth markets of the company.

The suspension of sales in Russia, Belarus and Ukraine together contributed five percentage points of an expected 6 per cent decline in revenue last month compared to the same period a year ago, according to the retailer’s latest quarterly report.

H&M’s shares fell as much as 1.2 per cent when trading started in the Swedish capital on Monday before recovering to trade off 0.4 per cent at SKR129.82 in mid-afternoon. - Bloomberg