The Russian Fashion Retail Market - Igedo Company

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3.2. ARMANI COLLEZIONI opened mono-brand store in Ekaterinburg July 7, 2010, malls.ru As it was announced by Michail Kuznirovich, majority share holder of BOSCO DI CILIEGI, the company opened its fifth store for ARMANI COLLEZIONI at the shopping mall EVROPEYSKIY in the city of Ekaterinburg. The shop composing a retail space of 170 square meters, offers men's wear together with women's wear and accessories under this Armani second line brand. It is located in the neighbourhood of mono-brand stores for ETRO and HUGO BOSS, which also belongs to the network of luxury brand boutiques owned and managed by Bosco. A further store under ARMANI COLLEZIONI is operated by BOSCO at Koltzovo, the airport of Ekaterinburg. 3.3. Growing GINGER teen-wear chain in the regions July 8, 2010, shopandmall.ru GINGER is a Russian retail chain selling trendy clothes for children and teenagers from 7 to 17 years. Up till present the company operates above 20 stores in regional cities like Ekaterinburg, Vladivostok, Kirov, Murmansk, Nizhnevartovsk, Zheleznagorsk; Irkurtsk and others as well as in Astana, Kazakhstan. GINGER announced plans to expand the network by 13 new stores across Russia. The company further stated that it is in course of trading up its brand to become more attractive. 3.4. METRO CASH & CARRY taken to court by clothing supplier July 9, 2010, advertology.ru/RBC Daily As it was reported by the head of corporate communication of the Russian subsidiary of German Metro Cash & Carry Group, Oksana Tokareva, the company was taken to court by one of its largest clothing suppliers, LLC LAMIS, claiming to recover an amount of RUR 300 mn (€ 77 mn, US 100 mn) for not provided marketing services. According to the law firm Partnership, representing LLC Lamis at the Moscow Arbitration Court, the clothing supplier has delivered merchandise invoiced to Metro for the amount of RUR 1,2 bn. Metro paid RUR 900 mn and declared the balance of RUR 300 mn as a bonus due by the supplier for marketing services provided by Metro for Lamis. The company denied that such an agreement had been concluded with Metro. In this first stage of appeal, the court decided in favour of Metro. According to Maxim Puras, a partner in the law firm representing Lamis, a second appeal will be brought forward because there is no written agreement apart from the order placement ruling the right for bonus claims in favour of Metro. 3.5. ADIDAS breaks customer relationship with SPORTMASTER and SPORTLAND August 2, 2008, malls.ru/Kommersant A dispute between ADIDAS and its largest Russian wholesale clients, SPORTMASTER and SPORTLAND on a decrease of discounts on turnover, new terms for invoice payments such as on adjustments of price reductions for inventories in favour of ADIDAS has lead to a break in the business relationship between the supplier and the two large Russian retail chains of sports goods and apparel. SPORTMASTER declared that the new terms proposed by ADIDAS would have lead to unprofitable working conditions for the company if they had been accepted. The break of cooperation does not extend to Russia alone but also to Ukraine. In turn ADIDAS is said to develop both markets independently, cutting the wholesale business down and to concentrate expansion on own stores. For this purpose ADIDAS will open its own Russian distribution subsidiary which will also 6
take responsibility for the Belo-Russian market. According to Kommersant ADIDAS announced to open approximately 15-20 stores in the territory in 2011, all countries which are part of the new Customs Union which Ukraine is expected to join in 2011. 3.6. Russian DETI childrenswear chain planning large scale expansion August 5, 2010, shopandmall.ru/ Retailer.ru/PMR This St. Petersburg based retail chain of childrenswear and accessories, specialising in super-and hyper-market formats of stores from 350 to 2,500 square meters has recently opened its largest store of 3,000 square meter retail space under its brand DETI at Mega –Belaya Datcha in Moscow. In August 2010, the company has launched a further store of 1.500 square meters at the Muscovite shopping center KLUCHEVOY. According to Retailer.ru DETI looks at developing similar such formats in large cities of the regions. The DETI chain consists of 28 stores in St. Petersburg and 15 in Moscow. There are rumours that ZDOROVIY MALYSCH another children's goods retail chain also based in St. Petersburg may go for a merger with DETI. This company operates 55 stores in St. Petersburg and two in Moscow. Both companies entered the Moscow market through the opening of stores launched under the name of DETI. Unable to solve the dispute over who has a stronger claim to the name, Zdoroviy Malysch is expected to acquire its competitor. Should the merger come to pass, the retailer will become a serious rival of DETSKIY MIR, the current leader on the Russian children's goods market. DETI is estimated to be worth US $ 355 mn. 3.7. STOCKMANN closing down old retail premises in St. Petersburg August 7, 2010, shopandmall.ru/ August 16, 2010, malls.ru After the opening of the shopping mall STOCKMANN NEVSKY CENTER on Nevsky Prospect at the end of 2010, the company will most probably shut its traditional STOCKMANN DEPARTMENT STORE which is also located on Nevsky Prospect. The old premises were under negotiation between STOCKMANN and H&M as a second store facility for H&M on Nevsky Prospect, but the parties could not agree in lease terms, although H&M will move as anchor tenant into the new STOCKMANN NEVSKY CENTER. At the moment the average rent on Nevsky Prospect is in between RUR 3.500 and 5.000 (€ 90,-/US $ 117,-) per square meter per month. According to RIA Novosti, the Russian news agency, Finnish retailer STOCKMANN recorded sales in 2009, which fell by 16,3 per cent against 2008 to € 212,7 mn. Over the first six months of 2010 STOCKMANN registered earnings accounting for € 97,5 mn compared to € 81,1 mn in the fist semester of last year. The operating loss declined from € 17,5 mn to € 10,2 mn. As of July 2010 STOCKMANN runs 5 department stores in Moscow and one in St. Petersburg. Besides the department store business the company operates mono-brand clothing stores under the brands of Seppala, Lindex and Bestseller which are also controlled by STOCKMANN in the Ukraine. 3.8. NEW LOOK to sign partnership with DELTA SPORT in Ukraine August 10, 2010, liveretail.ru British young fashion retailer NEW LOOK prepares its further expansion in Russia in co-operation with its master-franchiser DELTA SPORT since the beginning of 2009. At present NEW LOOK covers Russia by a number of 14 stores. According to the terms of contract DELTA SPORT committed to open a total of 96 NEW LOOK stores in Russia over a period of 5 years. In July the British extended the cooperation with DELTA SPORT on the territory of Ukraine. DELTA sold its original distributionships for SPRINGFIELD, WOMEN'S SECRET (Cortefiel) and COLOURS & 7
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The Russian Fashion Retail Market - Igedo Company

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