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

The Stockholm-based company expects to book costs of 2 billion kronor (S$265.2 million) from the process, of which about 1 billion kronor will have a cash-flow impact, it said in a statement.

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

She added, without elaborating: “We are deeply saddened about the impact this will have on our colleagues.” A company spokesperson said about 6,000 employees in the country would be affected.

H&M’s Russian business accounted for about 4 per cent of its 199 billion kronor in sales during the last financial year. Russia is the company’s 6th biggest market, and H&M 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 5 percentage points of an expected 6 per cent decline in revenue last month, compared to the same period a year ago, said the retailer’s latest quarterly report.

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The company suspended its business in Russia in early March in the wake of Western sanctions against Moscow following its invasion of Ukraine. The group plans to reopen its physical stores in Russia for a limited period of time to sell remaining inventory. It had been increasing its store count there while reducing physical stores in many other markets.

H&M’s shares fell as much as 1.2 per cent when trading started in the Swedish capital on Monday. BLOOMBERG, REUTERS