German luxury fashion house Hugo Boss has announced the completion of the sale of its Russian business, becoming the latest Western company to leave the lucrative market, 30 months after Moscow launched a special military operation in Ukraine.

The new owner of Hugo Boss Russia is now Stockmann. The amount of money Stockmann invested in the deal was not disclosed. Stockmann operates in Russia separately from its former Finnish owner.

Russian corporate databases show that Stockmann owns 100% of Hugo Boss Rus LLC's nominal value of 40 million rubles ($470,000).

The Russian branch of luxury fashion house Hugo Boss operates 19 stores in Moscow, the Moscow region, St. Petersburg and Rostov-on-Don. Photo: UNN

In late April, Hugo Boss agreed to sell its Russian business. Russian authorities require Western companies selling their assets in Russia to take a mandatory 50% discount and pay an additional 15% to the budget.

The deal to sell Hugo Boss' Russian arm was completed on August 2, Reuters reported. One of the conditions of the sale was that all jobs be preserved.

"We can confirm that our subsidiary in Russia has been sold to Stockmann JSC – a company belonging to one of Hugo Boss's long-standing wholesale partners in this country," said a Hugo Boss representative.

After Russia began a special military operation in Ukraine in February 2022, Hugo Boss closed its stores in Russia, suspended online sales in the Russian market, and stopped advertising. At the end of 2022, Hugo Boss Rus had 19 stores in Moscow, the Moscow region, St. Petersburg, and Rostov-on-Don.

Amid the sweeping sanctions imposed on Russia by the US and EU, many Western companies have announced the suspension of operations in this market or complete withdrawal.

One of the first German companies to announce its withdrawal from Russia was Volkswagen, which announced it just weeks after the conflict began. A year later, the company sold its factory in Kaluga for 160 million euros.

However, according to Die Zeit, Volkswagen actually returned to the Russian market in early June this year, starting to sell cars under the Jetta brand. These are similar models that are re-engineered from original models produced by the Chinese FAW group using German components.

Jetta has long been imported into Russia under the parallel import program, but according to Die Zeit, a few weeks ago, Jetta Motors informed the Russian business media about its official debut.

Volkswagen itself says it knows nothing about its business in Russia. However, as the publication stresses, this “does not seem very plausible.”

Before the war broke out, 4,000 employees worked for Volkswagen in Russia and the German group's investment in production amounted to 2 billion euros.

Minh Duc (According to RFE/RL, Moscow Times)