Last week the State Legal President’s Administration of the President’s Administration distinctly opposed the Bill On Trade – they gave a negative reference to it. As a result the second reading was postponed for an uncertain term in spite of the fact that at the beginning of November the document was approved at the meeting at Gennady Zubkov’s, and on December, 2nd the relevant State Duma committee for Economic Policy recommended approving the document during the second reading.
Before the second reading of the Bill On Trade the retailers thought about the meaning of “socially important products”, for which taking bonus even a 10% is forbidden. The Bill doesn’t stipulate their list, thus the legal department of the State Duma offered to consider the products mentioned in Article 164 of the Tax Code to be socially important ones. The retailers said that in this case the list would contain 90% of the product assortment.
On Wednesday the President’s Administration blocked the bill reading. The government machinery, which earlier tried to coordinate the interests of the trade networks and agriculture industry, is to repeat its attempt within 7-10 days.
The State Duma ignored the initiative of the President’s Administration to postpone the second reading of the Bill On Trade for December, 17th and to mitigate it. The State Duma didn’t conduct the document’s reading — it was postponed for Wednesday, December 11th. The last version of the amendments to the bill made by the State Duma received some innovations. Among them there is the right of the regions and municipalities to directly control the prices for some goods, and also to remove the consumer cooperation from the law restrictions.
On Thursday, after considering the action from Pervaya Ekskalatorno-Liftovaya Company Ltd., the Arbitrage Court of the Krasnoyarsk region admitted the bankruptcy of the major supermarket network ALPI Public Corporation and appointed the bankruptcy proceedings.
During January-September 2009 Magnit Public Corporation, Russian retailer with the largest number of stores, increased the net unaudited receipts according to the International Accounting Standards at 51.8% in comparison with the same period in 2008 up to $180.5 million. The net receipts in USD decreased at 3.3% and came up to $3.752 billion. EBITDA increased at 31.8% and reached $349.8 million.
Magnit was the last public retailer to report for the first nine months of 2009. During this period the Krasnodar retailer turned out to be the most profitable among its competitors. However, the market leader is still X5 Reatil Group, which is still keeping the positive consumers’ traffic. Diksi is traditionally keeping the third place due to its problems with logistics.
During the telephone conference with the Magnit investors Sergey Galitskiy, the company General Director, informed that in 2010 the retailer would invest up to $1 billion rubles in its development. Within the next year the company might open 25-30 hypermarkets and 450-550 house stores. Earlier the company reported about its plans to open 16 hypermarkets and 250-270 discount stores in 2010.
The retailer network Magnit was the first among the consumer companies to create its own pension fund for its employees: the retailer purchases Private Pension Fund “KhKP “Dobrodetel” from Moscow and renames it into Private Pension Fund “Magnit”.
It also became known that in 2010 Sergey Veretschagin and Oleg Trykin, the co-owners of the retail network Azbuka Vkusa, are to invest about $10 million in developing the near-by supermarkets Olivier.
There appeared the information that Sberbank-Capital might take the control stock of another trading network Vester for its debts. One of these days Sberbank finished due diligence of the Vester network, a member of GK Vester. Sberbank-Capital might receive 50% plus 1 share and write off 1.8 billion rubles of the debt. Moreover, the bank will help to restructure the remaining credit portfolio of the whole group, which is about 5 billion rubles: it will give additional credit.
The night opening of the household appliances and electronics store of the German network Media Markt in the shopping center Alatyr in Yekaterinburg widely announced before was spoilt. In spite of the organizers’ statements, the store couldn’t start working at midnight on December 10th, 2009. Managers and guards of the shopping center had to communicate with the potential buyers, who came to the center at night.
In 2010 the budget for educating the commercial staff of the Eldorado network might increase three times and come up to $1 million. The program will touch upon all commercial staff categories: sellers, cashiers, store managers. The seller teaching program will widen the articles responsible for the level of the assortment knowledge and some particular categories of goods. Managers of the stores and district departments will get advanced training in management, finance and staff recruitment.
The mobile retailer Euroset signed an agreement with the Orgloto company (operator of the Gosloto lottery) on placing lottery ticket terminals at the network stores. This is the second lottery operator, which the network is going to cooperate with: in April, 2009 Euroset signed the same contract with the Russkoe Loto company.
It also became known that till the end of the year MegaFon was to increase its retail network up to 1500 stores, and by 2011 number of the operator’s branded stores would be twice larger. The operator might spend $120-150 million for achieving these targets. Thus, leaving Svyaznoy behind MegaFon retail network will become the third major one after MTS and Euroset.
On Wednesday the Moscow Arbitrage Court postponed investigating the action of Euromoda Ltd. on the bankruptcy of Dikaya Orkhideya Close Corporation till February, 9th. The session was postponed due to the fact that the debtor wasn’t duly informed and didn’t attend the court meeting.
On December 7th, 2009 the coupon yield on the obligations issued by the leading company Detskiy Mir-Center Public Corporation was purchased. The size of the yield to be paid off is 49 277 500 rubles or 42.85 rubles per obligation.
It also became known that the network Detskiy Mir selling goods for children discussed creating a joint venture with the foreign retailers – American Toy R US and Greek Jumbo. The exchange rate instability and demand reduction resulted in the decrease of the Detskiy Mir proceeds for January-September 2009 at 35.9%, while the debt load is almost 10 billion rubles. This urged AFK Sistema, the network owner, on seeking for a co-investor.
Top-Kniga, one of the major book selling companies in Russia, closed its store network Knigomir in Tashkent (4 stores). Closing the stores in Uzbekistan was conducted for optimizing the business of the Russian company, as well as for “liquidating the unprofitable projects”.
The digest was prepared by Retailer.RU and was translated by iTrex company. Itrex is a translation bureau. It offers written and oral translation, notary certification and a lot more. Itrex does work with every language: European, Eastern languages and others. Itrex does work with every topic: technical, legal, financial, business, etc.