X5 Retail Group

X5 may not reach expected results

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Sales growth of the biggest Russian retailer X5 Retail Group would not reach previously expected 15 per cent, Kieran Balfe, chief financial officer, warned investors on a conference call. Earlier Balfe said that the growth rate would be about 15 per cent for this year – but for the first half of the year X5 revenues rose by only 7.2 per cent.

The sales in hypermarkets fell by 14 percent in July. Net profit of the retailer fell by 6.2 percent to $ 68.9 million. EBITDA decreased by 1.6 percent to $ 280.3 million.

Despite the fact that the X5 Retail these results are still not bad, they do not seem so so good if compared to the indicators of the Magnet, X5 main competitor, according to VTB Capital analysts. Magnit EBITDA profitability reached 10.1 percent in the second quarter.

Source: www.retailer.ru

 

Wal-Mart on the Russian market

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The world’s largest retailer, Walmart hired ex-employee of X5 Retail Group, Russian biggest retailer; on Monday, Catherine Ishevskaya was appointed a vice-president of the company, before that she was in charge of X5 purchasing department. Ms. Ishevskaya and Lev Khasis, former head of X5 who has been working for Walmart for a year, now are responsible for integrating retail business models into developing markets – among them there may be the Russian market as well.

In February 2012, during the interview with TV channel Russia Today, Mr. Khasis said that the possible return of Walmart on the Russian market would be in 2 years. The first attempt of the retailer to conquer the Russian market failed: the Moscow office was closed in February 2011 – Walmart did not purchase local retail networks – hypermarkets “Lenta” and discounters “Kopeika” (the latter was sold to X5 Retail Group in 2011).

Walmart managers went to Moscow on a business trip 3 weeks ago – Lev Khasis with five other Walmart vice-presidents came to Moscow. Walmart talked with “Lenta” managers during the visit to Russia, according to some sources. But so far, “Lenta” does not have enough supermarkets, though it is going to develop and open 46 hypermarkets in Omsk, Novosibirsk, Moscow and other cities.

Source: www.retailer.ru

Russia’s retail news August 2012

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In the beginning of August it was announced that 20 August Luc Koenot would become a new CIO of X5 Retail Group, before he was a SVP & CIO at the large Belgium retail company Delhaize Group.

Andrej Rogachev who was one of the founders of retail networks Pjaterochka and Karusel (now they are the parts of X5 Retail Group) is going to open a new discounter network Okey-Dokey in the USA. The first store will be opened 1 September in Miami. It is planned to open 8-12 discounters till the end of the year and 50 stores more in 2013. Agro-Trade International is going to develop the network; the investments into the project are estimated at about $500 million.

Finnish retail network Prisma is going to open 2 new supermarkets in St. Petersburg in August and in October, so the total amount of Prisma supermarkets will be 11 in St. Peterburg and Leningrad region. By January 2013 the company is going to open 3 supermarkets more.

Source: www.retailer.ru

X5 chief executive steps down

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Despite only being in role for a year, poor results have resulted in Andrei Gusev’s resignation

On the day that Russian’s leading grocery retailer X5 Retail Group released a mixed set of results for the second quarter and first half of the year, its chief executive officer Andrei Gusev has announced his resignation.

According to a press release from the company, Stephan DuCharme, a member of the group’s supervisory board, will step into the role on a temporary basis with the board set to begin a search for a long-term replacement.

X5’s operational results revealed that second quarter like-for-like sales fell 1.1 per cent, following drops of 3.9 per cent and 2 per cent in the two previous quarters, while half-yearlike-for-like salesdropped 2.5 per cent.

Source: www.fruitnet.com

Second tier retail chains are leaving the Russian market.

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Second tier retail chains are leaving the Russian market, Sergey Galitsky, Magnit CEO, said during the telephone conference. Meanwhile the competition among top three retail chains – X5 Retail Group, Magnit and Dixi – will keep escalating. Sergey Galitski confirmed their plans to raise gross revenues in 2012 at 25-30%, and EBITDA – at 7.5-8%. Magnit is one of Russia’s largest retail chains in terms of sales volume. As of 31 December 2011, the company operates 5,309 stores, including 93 hypermarkets and 210 drogery shops.

Source: www.retail.ru

X5 slides after director quits

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The X5 Retail Group has fallen to its lowest point in more than two weeks after the director of its discount format division of 15 years quit.

Shares slid 5.2 percent to $25.05 at 12 p.m. in London trading, the weakest intraday level since Feb. 16. Oleg Vysotsky will continue to manage the division until a replacement is found and will then serve as a transition adviser, X5 said in a statement today.

“Mr. Vysotsky was one of X5’s star managers, who has helped to make discounters the company’s best-performing business,” said Luis Saenz, chief executive officer of the U.S. unit of Moscow-based brokerage Otkritie Financial Corp. in an e- mailed note today. “His departure is likely to weaken X5’s core segment.”

Source: www.freshplaza.com

Wal-Mart sees promise in Russia, X5 denies deal

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U.S. retail giant Wal-Mart, which has flirted with entering Russia for years, still sees promise in the vast country, and will continue to look for the right opportunity, it said in a statement on Wednesday.

Its comment followed a report in St Petersburg-based Russian magazine “Delovoi Peterburg” that it is in talks to buy the Karusel hypermarket chain from X5, Russia’s top food retailer by sales. The report said that a deal may be announced in around two weeks.

Analysts estimated such a deal could be worth $2 billion. An X5 spokeswoman said: “We deny these reports categorically.”

Wal-Mart has looked at Russia for years but appeared to have given up in December 2010 when it closed its Moscow office due to a lack of acquisition opportunities.

It reawakened speculation it was still interested in Russia when it hired Lev Khasis, the former head of X5, as a senior vice president in September 2011.

A research report by analysts at Uralsib said X5 could ask around $2 billion for the hypermarkets which “would provide quick entry to Russia for Walmart.”

Source: www.reuters.com

X5 Retail Group predicts growth slow down

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Russia’s biggest food retailer in terms of sales, the X5 Retail Group, anticipates a slow down in top line growth this year, from 32% down to 15-20%.

“Obviously X5’s growth has slowed down naturally and it is understandable given the size of the company… The kind of 30 to 40% growth that we did historically won’t be in place any further,” Chief Executive, Andrei Gusev said.

X5 this month posted its first drop in quarterly underlying sales since its creation in 2006 and missed its full-year 2011 revenue growth forecast, sending its stock down 10%.

Source: www.freshplaza.com

Russian and Dutch investment team plan Florida launch

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Russian retailer, Agro Trade, is looking to build a chain of retail stores in Florida, with the backing of a Dutch investor. The company is looking into a potential 400 stores to create a projected $1 billion of sales within four years.

The scheme would be backed by a Dutch investment to the tune of $500 million, from the same firm that backed Russia’s X5 Retail Group. Andrei Rogachyov, who founded those chains and remains an investor in X5, is separately heading AgroTrade International, according to a report in the Moscow Times newspaper.

It is not clear what branding Agro Trade would seek to use in its new stores, though it is expected they will begin trading this year from around 60 outlets.

Source: www.freshplaza.com

X5 Retail Group may start direct import of fruit and vegetables

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As per RBK daily, Russian largest retail operator is considering a possibility of direct fruit and vegetables import, excluding distributors from the supply chain. The appropriate decision may be made within the next few months. X5’s main rivals – Magnit and Dixi – have been importing fruit and vegetables independantly for more than a year. The share of fruit and vegetables in the total revenue of a retail chain may reach 12%.

X5 may start direct import of fruit and vegetables in a few months after the company has finished the calculations. Traditional suppliers are Turkey, Africa, South America and Europe.

Source: www.retail.ru