Page 5 - bne magazine November 2021_20211104 uzbekistan risding

bne November 2021 Companies & Markets I 5
Mozhaeva emphasises. “This year, we’ve opened 53 stores since the beginning of the year. By the end of the year,
we’ll have at least 390 stores, which is a growth of over 20% when compared with the end of 2020.”
This raises an obvious question: does Familia have any plans to go abroad? With stores in 111 towns across Russia as well as one in Minsk, it seems the obvious next step is to follow the likes of Russian e-commerce major Wildberries and expand into Western Europe. Mozhaeva was reserved: “We plan to grow step by step, in a sustainable manner. We may go to some other countries in several years. Perhaps growing in Belarus, or going to Kazakhstan. But our first and clear priority is the Russian market.”
In a country with 11 time zones, logistical efficiency is key. This is a key part of Familia’s business model. The company has a network of 370 stores and a large distribution centre, providing it with a robust infrastructure backbone. Moreover, Mozhaeva explained, they manage to keep their debt level very low. “We have a positive cash flow from our current activities, and we always invest our current profit to grow
the new stores. There’s a short payback period for our new stores.”
Another quirk of this sector is the reliance upon bricks
and mortar. Russia’s e-commerce is booming, but Familia specifically has no online sales at all. Familia is investing heavily in stores, and the only thing it sells online is gift cards.
Mozhaeva explains the phenomenon: “Firstly, we don’t want to go online because we don’t want to compete with our suppliers. We have a special discount price. When it’s offline, this merchandise doesn’t compete with sales from the brand. Also, when the season finishes, the brand needs space for the new collection, and we utilise the old collection through our chain. This is very convenient for the brands.”
The issue is that the discounts that Familia can offer are
very big indeed. The high street top fashion companies have invested very heavily in their brands and use their brand strength to justify their high prices. If Familia offers the same brands at knockdown prices, the producers are afraid it could devalue their brand and hurt their primary sales. On the flip side Familia is happy to oblige, as a shopper who can find
a famous brand at bargain-basement prices is delighted at their discovery. Putting Familia’s inventory online makes it altogether too easy to make side-by-side comparisons.
Familia’s potential hasn’t gone unnoticed by international investors and global peers – its shareholders include high- profile financial investors, such as Goldman Sachs and Baring Vostok, while American off-price giant TJX is a strategic investor. When asked whether an IPO was on the horizon, Mozhaeva demurred: “It may happen at some point, but it’s too early to say either way at the moment.”
“This year, we’ve opened 53 stores since the beginning of the year. By the end of the year, we’ll have at least 390 stores, which is a growth of over 20% when compared with the end of 2020”
Svetlana Mozhaeva, CEO of off-price Familia
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