Page 149 - RusRPTAug22

sales). o Digital GMV grew 5x y/y to Rb7.4bn (1.5% company total). ● In July to-date, Magnit noted that LFL sales growth continued
accelerating vs previous months and exceeded the 2Q22 average. Within LFL sales structure, traffic has stabilized and started improving while average ticket growth remained strong supported by marketing campaigns and in-store improvements.
• Other
Swedish fast fashion giant H&M is looking for a local buyer for its Russian assets, according to Kommersant daily, citing unnamed sources. Earlier this month the company said in a statement that it had decided to initiate a process of winding down its business in the country. This follows a number of fashion brands that have announced they are either suspending or terminating Russian operations amid the military invasion of Ukraine. But, as covered by bne IntelliNews, the departure of H&M will also have negative spillovers on other sectors, such as textile recycling. Shopping centres could also face structural problems with traffic without tenants such as H&M that maintained a high turnover of assortment, analysts told Kommersant daily. Reportedly, the hefty assets put up for sale by H&M include a portfolio of lease rights for around 170 shops in 65 Russian cities, of which 40% operate until 2050 and 50% until 2030-2050, as well as a 57,700-square metre distribution centre and 30 weeks' worth of inventory with an estimated value of $210mn. The retailer had previously planned to temporarily reopen physical stores for a limited period to sell its remaining inventory in Russia and estimated the cost of pull-out at $192mn. (SEK2bn). Analysts and market participants surveyed by Kommersant believe that sales space leasing contracts of H&M are particularly attractive, but doubt that a single buyer could emerge for such a large portfolio. In addition, some shopping centres have already started unilaterally terminating lease contracts. Offers were reportedly received by the largest Russian fashion retailers, Melon Fashion Group (over 840 shops under Zarina, Befree, Love Republic and Sela brands) and Sportmaster Group (over 600 outlets).
9.2.7 TMT corporate news
● Yandex
Yandex is discussing a potential purchase of rival food delivery service Delivery Club, according to a report from news service The Bell. VK and Sberbank are seeking a buyer for Delivery Club, according to the report, and are discussing that deal in parallel with a sale of media assets (Novosti news, and the Zen recommendation platform) by Yandex. That could mean a straight asset swap if approved by regulators. But in any case, Yandex will buy only if both VK and Sberbank can agree on who will buy them out of the joint venture that owns Delivery Club. Yandex shares have remained halted for trading in
149 RUSSIA Country Report October 2020 www.intellinews.com