Happy Sunday everyone!

First up — Zara’s Russia retreat might not be so final after all. A Financial Times investigation reveals that Inditex’s exit may have been engineered to leave the door open, thanks to a franchise handoff to Lebanon’s Daher family—owners of Dubai’s Azadea Group.

Meanwhile, Saudi Arabia’s PIF keeps doubling down on global sports. It’s now the official partner of the FIFA Club World Cup 2025 in the US, backing a tournament that’ll see 32 top football clubs compete in 63 matches across American stadiums.

And in Washington, Reuters reports the US is weighing a $500 million aid package to the Gaza Humanitarian Foundation (GHF) — a new group facing scrutiny over security, distribution challenges, and ties to private contractors.

But before that: For quick daily updates, follow us on Instagram, and you can watch our Smashi Business Show live every weekday from 10AM onwards (UAE time). Also, you can join our Whatsapp channel to receive updates from the business world.

Zara’s Russia Exit Appears Engineered for Swift Return via Lebanese Daher Family Deal

What Is It About:

• A Financial Times investigation reveals that Spanish fashion giant Inditex, the owner of Zara, may have quietly structured its 2023 exit from Russia to allow a potential comeback.

• Inditex, which also owns Bershka, Pull & Bear, and Stradivarius, suspended operations just nine days after Russia’s 2022 invasion of Ukraine and formally exited eight months later.

• The Russian business was sold to Mixed R DMCC, a company controlled by Lebanon’s Daher family, who also own the Dubai-based Azadea Group.

• Azadea, led by CEO Said Daher, operates Zara and Virgin Megastore across the Middle East and was valued at over $1 billion in 2018 after a deal with Dubai Holding, according to Bloomberg.

Why It Matters:

• Though Inditex claimed the buyer was unrelated and the sale amount “not significant,” Mixed R DMCC swiftly launched Zara-style replacement brands—Maag, Dub, Ecru, and Vilet—in the same stores with the same suppliers, staff, and even photoshoot teams.

• According to documents seen by the Financial Times, the deal allows Inditex to re-enter Russia via a no-cost franchise agreement, preserving infrastructure for a fast return if political conditions improve.

• Between late 2022 and mid-2023, Inditex injected over €65 million into its Russian unit and wrote off a €120 million loan—moves experts called unusual for a company exiting a market.

What’s Next:

• While Inditex insists it no longer has involvement in its former Russian operation, over 800 apparel shipments from the Middle East arrived in Russia before the sale closed—hinting at a seamless transition.

• Many former Inditex employees in Russia relocated to the UAE to work with the new entity.

• Experts describe the setup as part of a broader pattern of “boomerang” exits—designed to maintain access to the Russian market without violating sanctions.

• Inditex denies these claims and says it acted legally and transparently.

Markets

PIF backs Fifa Club World Cup in the US

What’s it about:

• Saudi Arabia’s Public Investment Fund (PIF) has been announced as the official partner of the FIFA Club World Cup 2025, which will be held in the United States from June 14 to July 13.

• The month-long tournament will feature 32 of the world’s top football clubs, with 63 matches culminating in a final at MetLife Stadium in New Jersey.

• The agreement with FIFA is part of PIF’s broader push to fuel football growth and engagement, though financial terms of the deal were not disclosed.

Why it matters:

• The sponsorship is the latest move in Saudi Arabia’s ambitious sports investment strategy, part of its Vision 2030 plan to diversify the economy and project soft power through sport.

• In December 2024, Saudi Arabia was confirmed as host of the 2034 FIFA World Cup, with plans to build eight new stadiums across five cities, including Riyadh, Jeddah, Neom, Abha, and Al Khobar.

• PIF has now signed over 900 sports sponsorship deals, reflecting the scale and seriousness of the kingdom’s commitment to becoming a global sports hub.

• Saudi Arabia currently has 300,000+ children participating in school football leagues, supported by 23 youth training centres and 19 national teams.

What’s next:

• PIF’s involvement in the Club World Cup marks its deepening relationship with FIFA, positioning the kingdom as a central player in international football governance.

• The deal is expected to boost Saudi Arabia’s global visibility ahead of its hosting of the 2034 World Cup, while also supporting football infrastructure and grassroots development.

• PIF is also considering stadium development projects abroad, including for Newcastle United, which it owns via a consortium, signaling further expansion into elite football.

US Weighs Providing $500 Million in Aid to Gaza Humanitarian Foundation (GHF)

What it’s about:

• The US State Department is considering a $500 million aid package for the newly formed Gaza Humanitarian Foundation (GHF), Reuters reported, citing two sources and two former US officials with knowledge of the matter.

• The funding would be channeled through the US Agency for International Development (USAID), which is being folded into the State Department.

• The GHF began distributing aid last week in Gaza after an 11-week Israeli blockade was lifted on May 19.

Why it matters:

• The plan has sparked concern among some US officials due to deadly shootings at aid sites and doubts over GHF’s capacity and neutrality.

• Humanitarian groups, including the United Nations, have criticized GHF’s operations and alleged lack of impartiality.

• Over 80 Palestinians were reportedly killed near GHF distribution sites between June 1–3, according to Gaza hospital officials. Israeli forces claim they fired warning shots or responded to “suspects.”

• The foundation’s aid efforts have already been disrupted twice due to overcrowding and operational chaos.

• GHF relies on private US security and logistics firms. Reuters reports that McNally Capital, a Chicago-based private equity firm, has an “economic interest” in the for-profit contractor handling these operations.

What’s next:

• Acting deputy USAID Administrator Ken Jackson, a key figure in dismantling USAID programs, is reportedly championing the proposal.

• Israeli officials requested the funds to support GHF’s operations for a 180-day period, according to Reuters sources.

• Some US officials are pushing for experienced, neutral NGOs to be involved if the funding is approved—an idea Israel is likely to resist.

• Neither the State Department nor GHF has commented publicly on the matter, and the funding decision remains pending.

🔍From Smashi Business’ Desk

• Lebanese Founder Turns Down New York Times Job, Citing “Complicity in Genocide”.

🔍In other news…

• Dubai home sales surge to record $18.2bln amid population boom.

• UAE investment in data centres may be overly optimistic.

• China to build $1bn lithium battery plant in Oman.

• Builder.ai owes money to corporate spies and defamation lawyers.

• ADGM reports 33 percent AUM growth in Q1 2025 highlighting strong market confidence.

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