Page 102 - RUSRptOct18

Capital estimated previously on August 31, warning that the retailer "has yet to optimise efficiency in the hypermarket business to the targeted level and accelerate the roll-out of discounters, as well as bring them to the breakeven point." O’Key saw its organic top line slowing 1.4% in the first half of 2018, hit by unfavourable the macro environment and one-offs.
The Mexx clothing brand will return to the Russian market in 2019. The brand distributor, BNS Group, has signed a contract with the new owner of the brand - the Dutch holding company RNF. The first store will be opened in April 2019. In five years the company plans to open a total of 15 stores in Russian cities. But the number can change and will depend on demand. The area of the shops will noticeably decrease: from 300-700 square meters earlier to 130-140 square meters in the new plan. BNS Group brought the Mexx brand to the Russian market in 1997 and was its exclusive partner in the country. In 2017, the distributor closed all Mexx stores in Russia due to problems with the former owner of the global business of the company - the Turkish Eroglu Holding.
French household appliances, building materials and DIY chain Leroy Merlin will build the largest logistics centre in the Moscow Region, RIA Novosti reported citing the representative of the company. The $147mn centre will be the largest in Russia and will supply all Leroy Merlin shops in the country, creating about a thousand jobs. The centre is planned to become operational in the first quarter of 2020. Currently the chain operates four logistics centre in Russia, the largest having the area of 100,000 square meters, and the new one planned at 130,000. Leroy Merlin has committed to Russia and told bne IntelliNews t he country is a “goldmine” in an interview. The warehousing and logistic centre in Moscow is the first the company has built outside its core markets in Western Europe.
Russia's leading retailer X5 Group plans to set up joint ventures with Sovkombank and other large operators of automated pick-up points , as well as considering a partnership with electronic payment system Qiwi, Vedomosti daily said on September 4. As Russian supermarket chains are running up against structural limits to growth , X5 is speeding up its move online. Now the company wants to acquire 50% of CTB controlled by Sovkombank and operating 450 automated mini-locker pick-up points under Halva brand. The joint venture could be placing over 1,500 pick-up points in X5 stores in the next five years. Unnamed sources told Vedomosti t hat X5 also considers a joint venture with electronic payment system Qiwi and another operator PickPoint. The company might start not only placing pick-up points in X5 stores, but also to deliver the groceries to remote pick-up points. X5 previously aimed to process up to 1mn online orders daily by 2023, with analysts surveyed by the daily estimating that it would translate into 20% market share in the online grocery shopping segment.
Russian billionaire and senator Suleiman Kerimov is toying with the idea of acquiring a stake in Detsky Mir children's goods retailer controlled by AFK Sistema , the multi-industry investment conglomerate of Vladimir Yevtushenko, Kommersant d aily reported on September 5 citing unnamed sources close to negotiations. Detsky Mir is one of anchor assets of Sistema, but its SPO in 2017 and March 2018 was scrapped due to legal battle with Russian oil major Rosneft. Commenting on solid results of Sistema for the second quarter analysts anticipated Detsky Mir sale to be the next catalyst for the stock. Reportedly the negotiations with Sistema were renewed after
102 RUSSIA Country Report October 2018 www.intellinews.com