Page 119 - RusRPTFeb19

market), which is an attractive niche due to its low consolidation (the top five players have a share of 12% vs. 34% on the children goods market)," VTB Capital commented on December 6, reminding that the market leader, Beethoven, has a market share of only 2%. Detsky Mir plans to open around five stores in 4Q18 (and aims to reach ten stores in 1Q19), which are going to be based on an asset light model and located in the same shopping malls as Detsky Mir stores. Should Zoozavr to develop rapidly, that could represent an upside possibility to Detsky Mir valuation, VTB believes.
The Russian-Chinese Investment Fund (RCIF) is mulling the sale of its 14.03% stake in Russia’s leading children toy chain Detsky Mir, Interfax reported on January 23. The RCIF is a joint venture between the Russian Fund for Direct Investment (RDIF) sovereign wealth fund and the China Investment Corporation, which has been actively investing in Russian equities as a financial investment. Majority owned by AFK Sistema, Detsky Mir is one of Russia’s most attractive stocks and has been growing fast in recent years. The “Hamley’s of Russia,” Detsky Mir has gone from strength to strength and rolled out 121 stores in 2018, expanding its selling space by 12% y/y to 768,000 sqm, reports VTB Capital (VTBC). According to RDIF head Kirill Dmitriev, the owners of Detsky Mir received several offers to buy the asset. “If this asset is sold, then we will most likely join“ Sistema ”and sell it with Sistema. Here is a very simple logic - we have already sold part of the package as part of an IPO, our Russian-Chinese fund received a very attractive return. We went along with the Sistema, and accordingly, we plan to go out together with Sistema, he explained. The Detsky Mir Group is Russia's largest retailer of children's goods uniting 610 supermarkets and hypermarkets of the same name in 228 cities of Russia and Kazakhstan. It is also developing the ELC and ABC retail network with 56 stores, as of September 30, 2018. In February 2017, the company held an IPO on the Moscow Stock Exchange. Sistema owns 52.1% in the Children's World. Earlier, the main owner of Sistema, Vladimir Yevtushenko, noted that there is an agreement amongst the shareholder for a sale of a package of shares this year.
Russian consumer electronics retailing powerhouse M.Video announced the fourth quarter of 2018 operating results and its merger partner Eldorado on January 18 that detail the continue growth of the company. The businesses saw double digit growth, with consolidated revenues increasing 21.2% y/y to RUB118.8bn ($1.8bn) and like-for-like (LFL) sales growth of 14.6%. This was the result of a higher average ticket, driven by the rising share of digital products, accessories and services in the revenue mix, reports Sberbank CIB. M.Video completed a mega-merger with rival Eldorado in March 2018 to form the biggest consumer electronics retail chain in Russia, and a top ten European player, as bne IntelliNews detailed in an exclusive interview at the time. The German rival MediaMarktSaturn electronics retailer owned by the German Ceconomy that has invested heavily into Russia, conceded defeat and was also brought into the merged entity in June of the same year. Last quarter, the company opened 40 M.Video stores, two M.Mobile and 45 Eldorado stores in net terms, taking the total store counts to 475, five and 461, respectively. Total selling space was 1,392,000 m2 at the end of the period.
Russian supermarket Dixy and alcohol retailer K&B to merge Struggling supermarket chain Dixy Group will merge with alcohol retailer Albion-2002 trades under the Krasnoye & Beloye (Red & White) brand, their owners Igor Kesayev, Sergei Katsiyev and Sergei Studennikov, respectively, said in a joint
119 RUSSIA Country Report February 2019 www.intellinews.com