Determinants Of Apparel Retail Companies Exit Strategies Choice From The Developing Markets: Examples Of INDITEX And H&M On The Russian Market

Unlike internationalization strategies, the subject and strategies of corporate exit from developing markets remains surprisingly under-researched in business literature. Yet, in the light of peculiar risks inherent in the developing markets, but often hidden behind their allure, having a proper exit strategy may be crucial for success. This paper studies the apparel retailers’ behavior in Russia post-2022, highlighting the factors significant in informing their exit choice. We show that retailers more sensitive to public image and reputation concerns were more likely to exit Russia; among these, most opted for suspension of operations, while one-third managed to sell off. Exiting companies that had greater number of stores, staff, and revenues in 2021 were more likely to sell rather than suspend or close down their operations. The quantitative results are supported with a dual case study of Inditex and H&M whose subsequent performance is compared. Exit barriers that impede sale are analyzed, and managerial recommendations given.