Page 96 - bne IntelliNews Country Report: Russia Dec17

Euromonitor estimates, cited by Vedomosti. The value of the market is RUB105bn ($1.8bn). Currently Etam runs only 2 shops in Russia, but its franchisee, Fashion Studio, operates 30 shops in Moscow, St Petersburg, Sochi, Krasnodar, and Tumen. By the end of first quarter of 2018 Etam will buy out the stock and equipment from Fashion Studio and will rewrite the leases with shopping malls. The amount of the deal is not disclosed. Etam plans to cut prices by 25% to attract more customers, have 60 stores by 2020, and take a 3% market share in Russia. Currently the company has a share of 0.1%, with the largest players Milavista and Intimissimi leading with 2.2% and 1.3% market shares, respectively.
Founder and main shareholder of major Russian retailer Magnit Sergey Galitsky is to lend RUB44bn ($750mn) to its operational subsidiary Tandem , Vedomosti daily said on November 22. The report comes in a turbulent period for Magnit that saw its stock hit record-low after it sold shares to raise investment funds for the company. On November 15 the company held a surprise SPO, with Galitsky selling $736mn worth of Magnit's shares or 7.5% of total capital with 11% discount to the market. Now Galitsky, whose wealth is estimated by Forbes at $6.8bn, has extended a RUB44bn credit line at 0.26% annual interest until March 1 2018, as part of raising funds for Magnit group.
Russian supermarket chain Lenta, one of the largest retail chains in Russia, announced an agreement with the Holiday Group to purchase 22 supermarkets in the Siberia region on November 7. The 22 supermarkets currently operate under the “Holiday Classic”, “Kora” and “Holdy” brands. Of the stores, 11 are located in Novosibirsk region, 7 in Kemerovo and 4 Barnaul. The average selling space per store is around 800 square meters, giving total selling space of approximately 18,000 square meters. The stores are compatible with Lenta’s supermarket format in terms of size and layout, and the locations are complementary to Lenta’s existing stores in the regions. Lenta’s Chief Executive Officer, Jan Dunning said: “Lenta is pleased to announce an agreement to acquire 22 supermarkets in Siberia from the Holiday Group. This transaction will significantly strengthen our network in Siberia, giving many more customers the opportunity to shop at a Lenta store close to their homes. The stores all have good urban locations and are complementary to Lenta’s existing network.” Siberia is an important region for Lenta, the company said in a statement. Lenta opened its first hypermarket in Novosibirsk in 2006 and its first supermarket in the city earlier this year. It currently operate 36 hypermarkets and 4 supermarkets across Siberia, served by our distribution centre in Novosibirsk, according to the company’s press release.
Co-owner of online retailer Ulmart August Meyer reportedly granted a $10mn loan to the company ahead of the high-holiday season, RBC daily said on November 28 citing unnamed representatives of the retailer. Ulmart is one of the largest Russian online retailers but it has been suffering due to a shareholder conflict between Meyer (29.9%), Dimity Kostygin (31.6%) and Mikhail Vasinkevich (38.5%). Kostygin is currently under house arrest on the accusations of defrauding Russia's largest bank Sberbank in a loan deal, and reportedly Meyer stepped in to allow Ulmart pay the creditors and suppliers.
96 RUSSIA Country Report December 2017 www.intellinews.com