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Aug 13, 2014
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Inditex challenges Primark and H&M in Russia with Lefties stores

Aug 13, 2014

MADRID (Reuters) - Inditex, owner of global fashion chain Zara, has taken its revamped low-cost brand Lefties to Russia in its latest move to take on competition from budget brands Primark and H&M.

Inditex has been working hard to transform Lefties from a chain of stores selling Zara's last-season clothes to a label in its own right, giving it its own collection, a new image and new stores to tap demand for low-cost clothes.

A spokeswoman told Reuters Inditex had opened two stores in shopping malls in the outskirts of Moscow and a third one in the suburbs in St Petersburg, all on Aug.1.

The Spanish company does not generally communicate to investors or media its strategy about the brand or store openings. Inditex still gives no separate breakdown of Lefties results, instead including them in Zara's.

The spokeswoman declined to say whether Inditex was concerned about sanctions between the EU and Russia, where the company sells its other eight labels at more than 400 stores.

A Lefties store in Spain

Some European companies have postponed further investment in Russia as a precaution after U.S. and E.U. sanctions imposed over Russia's actions in Ukraine prompted a Russian ban on European food.

Until this month, Lefties, which had more than 100 stores at the end of March, was only present in its home country Spain and neighbouring country Portugal.

Analysts say the store's transformation to compete with Primark and H&M made it a good brand to take abroad.

Inditex's other eight labels ranging from teen brand Bershka through to upmarket accessories label Uterque have done well in fashion-conscious Russia. At the end of April Inditex had 74 Bershka stores in the country and 70 of its casual label Pull&Bear.

The firm also plans to launch an online shop for Lefties later this month, according to a report in Spanish news agency Europa Press on Monday which said it would unveil the website on August 22 as part of its bid to grow sales at the label.

Lefties already has a web page showcasing its collection but it is not possible for customers to order garments from it.

A spokeswoman for Inditex declined to confirm or deny the report.
(Editing by Julien Toyer and Sophie Walker)

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