News about the Russia-based grocery retailer Sedmoi Kontinent hit the headlines of the past "holiday week". The retailer was initially reported to have no plans to change the ownership structure and augment its debt but ready to share government credit instead. Such was Sedmoi Kontinent’s proposition to its ruble bond holders to ensure their agreement to restructuring.
The following day, France-based retailer Carrefour was reported to have signed a preliminary agreement with Alexander Zanadvorov, the owner of Sedmoi Kontinent, stating its intention to buy 75% of the chain from A. Zanadvorov and 95% of the retailer’s real estate from Mcapital. The agreement stipulates a period of exclusive negotiation for Carrefour. The French retailer is supposed to make a definitive offer on 15 May, upon completion of asset evaluation. The previous indicative offer of USD1.25 billion (less debt) by Carrefour for both the companies was rejected by Sedmoi Kontinent’s minority shareholders.
X5 Retail Group reportedly has begun to reformat some of its region-based Perekrestok supermarkets to the price oriented stores under Pyaterochka brand. Specifically, two stores in Lipetsk have already changed the format. Market players believe the steps taken by the Group are logical and could be predicted as discount retailers are more appealing to regional mass market consumers than supermarkets.
Mega-Don, Rostov-based retailer, announced development of a supermarket chain under a new brand. The first stores will be opening during 2009 in Rostov shopping malls owned by Mega-Don and in leased shopping sites. The company further intends to expand its presence in the southern region. Market experts believe the new supermarkets will open to to involve anchor tenants to the vacant selling space in Mega-Don.
NTS (Novye Torgovye Sistemy ), a Siberia’s largest retailer, had its buy-back offer accepted last week and found a use for its treasury bonds. NTS offered the bonds as security for payment to its vendors. The Novosibirsk-based company promises 15% yield to ensure rescheduling of its RUB200 million debt for six months.
Sistema RegionMart, Kemerovo, started its first large-forfmat store in Novosibirsk and means to launch at least one more store by the end of this year. Both stores under "Polyana" brand will be placed in the shopping space previously occupied by Krasnoyarsk-based ALPI hypermarkets. Market players point out the fact it’s the first time a newcomer to the market replaces a leaving retailer.
The bank VTB North-West has made a decision to increase O’Key Group’s credit limit to RUB1.5 billion for a 12-month period. The decision was taken in view of the significant increment in turnover and an increasing number of the Group’s stores.
It is reported that starting from 4 March, Firma "Omega-97", LLC (Paterson retail chain operator) has faced 16 claims from the vendors, totaling about RUB24 million. The most recent claim filed by Mercury-regions, LLC was registered in court on 28 April. Alexey Mauergauz, co-owner of Paterson chain, declined to comment. Following Y2008 results, the debt of the store chain exceeded RUB2.2 billion, according to the company’s Q1 2008 statements.
Sergey Galitsky, the owner and CEO of Magnit retailer, received a salary of RUB14.5 million in 2008, thus increasing 15 times as compared to RUB0.96 million in 2007, according to the annual statements of OJSC Magnit. Despite the salary-push, the CEO of Russia’s second largest food retailer, still earns 6 times less than his colleague Lev Khasis, CEO of Х5 Retail Group, the immediate competitor of Magnit with higher turnover. According to the Y2008 annual statements, Lev Khasis’ salary reached USD1.973 million plus USD2 million bonus (totaling RUB96 million at 24.7 RUB/USD exchange rate).
Metro Group published its financial statements last week. The Germany-based company being among the world’s largest retailers showed a net loss of EUR77 million in Q1 2009 vs. a net profit of EUR8 million YoY. Sales reduced by 2.5% down to EUR15.2 billion as compared to EUR15.6 billion YoY. EBIT dropped 3.3 times from EUR166 million to EUR51 million. Metro Group incurred a net loss of EUR77 million in Q1 2009.
Metro Group announced its intention to grow to world’s largest electronics retailer. Despite the economic downturn Metro AG is dynamically developing its cash-and-carry stores in Eastern Europe, particularly in Russia, and in Asia, for instance, in China. The company is now planning to become the most powerful player in the consumer electronics market.
Cell phone retail world was tranquil last week. MTS filed a petition to Federal Antimonopoly Service pursuing to acquire St. Petersburg-based Teleforum (193 shops) valued at about USD10 million.
Euroset has reorganized its Povolzhye district branch, one of its 8 branches in Russia. The number of its branch offices in the Povolzhye district lowered twice, from 13 to 6.
Sweden-based corporation IKEA closed the deals to purchase 2 land plots, 67 hectares and 50 hectares, located in Novousmansky district of the Voronezh Region. With the current prices, the land plots might cost as much as USD50 million. IKEA itself does not disclose the amount. So IKEA eventually enters the center of Chernozemye, despite the failure of its first attempt in 2006.
Sprandi LLC, Russian subsidiary company of Sprandi International, sports apparel and footwear manufacturer, filed its application to Moscow Arbitrage Court last week, declaring bankrupt. The sports apparel manufacturer is winding up its business in Russia and preparing to close down its stores.
Banana-Mama retailer to be charged with fraud. Main Directorate of Ministry of Home Affairs in Central Federal District instituted criminal proceedings for fraud against Banana-Mama group (investigation board has not yet identified the status of persons involved, including the group president Oleg Yakovlev). Vendors of the retailer initiating the case pursue to prove relationship between Banana-Mama chain and Trial shopping center, a bankrupt wholesaler owing over RUB1 billion to the vendors.
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