In what has been deemed as an unusual move, American fashion label Guess has reportedly reacquired its stake from its Russian partner.
The retailer is believed to have bought back its 30 percent share from local partner Vyacheslav Skikulov for eight million euros, according to Russian news outlet Kommersant.
The publication also said Guess had consolidated 100 percent of its Russian business after the deal was approved by the US Treasury Department.
It comes in relation to an agreement signed between Guess and Shikulov in 2015, where the latter was provided with the right to sell his stake in the business, requiring Guess to buy out the share by the end of 2025.
Shikulov is understood to have exercised the option in November 2022, seeing Guess apply for permission to conduct the buyback from the Office of Foreign Assets Control.
Analysts deem move ‘atypical’
The move comes despite a slew of Western retailers implementing exits from the Russian market, predominantly through sales of assets to local investors, a decision that was made by the likes of Inditex, which sold its 245 Russian stores to Dubai-based retail conglomerate Daher Group.
Guess itself operates 44 stores in Russia and also acts as a distributor for wholesale partners, Kommersant added, with the retailer’s revenue in the region growing by 24 percent in 2022 to four billion rubles.
In comparison to others, the activities of Russian Guess were reportedly not heavily impacted by the military actions of the Russian Federation in Ukraine, the report stated.
Meanwhile, many retail giants have faced mounting losses on their exit from the country, including H&M, which lost 363 million dollars, and Decathlon, which lost around 140 million dollars.
Managing director of Peregrine Capital, Dmitry Gabyshev, told the Kommersant that the deal was “atypical” in light of the current situation, and suggested Guess’ decision could be linked to a possible desire to transfer the business to a Russian investor.
Opportunities to expand business in Russia are currently limited due to the US ban on investments and additional sanctions.