KRASNODAR: Magnit PJSC, one of Russia’s leading retailers, announced that it has reached an agreement to acquire long-term leasehold rights for the 89 stores currently operating under Evroros, Yablochko, and Tvoy brands in Murmansk and Murmansk region.
Fifty-five stores are located in Murmansk, with the remaining ones spread across 11 cities of Murmansk region, including Apatity, Kovdor, Kandalaksha and others representing in total 52.7 thousand sq. m of selling space and 79 thousand sq. m. total space. Lease rights are planned to be acquired for up to 15 years.
All stores are compliant with Magnit format strategy in terms of size and layout, allow to significantly and efficiently build up geographical coverage in the region reinforcing Magnit position on the local market. The Company plans to open 69 Magnit Convenience stores, 18 Magnit Cosmetic stores (where 14 will be open together with convenience in the same locations) and 16 Magnit Family supermarkets. The deal allows to boost Magnit presence in Murmansk and Murmansk region to 235 stores or 97.0 sq. m selling space from current 44.3 sq. m.
All stores will be integrated into existing Magnit operational platform. Magnit plans to keep Evroros’ best practices mostly relevant to the local market and is contemplating to keep Evroros banner enjoying high customers awareness and loyalty. The Company is looking to keep Evroros’ store employees and potentially capitalize on some local management capabilities.
According to the reached agreement, the Company plans to acquire the leasehold rights in several pools, as far as and subject to successful legal and technical due diligence.
The acquisition of leasehold rights for the final pool is envisaged for the fourth quarter 2020. The stores will be redesigned where relevant and put in operations in several stages. The redesign does not imply significant investments and will not affect the 2020 capital expenditures forecast.
“I’m very pleased announcing our agreement with Evroros. This deal will substantially reinforce Magnit position in the region across all of our key formats. All stores are perfectly located and are very complement to the Company’s current geographical footprint in Murmansk and Murmansk region. We not only plan to keep Evroros outstanding staff and best local expertise, but to also capitalize on our extensive experience in improving the effectiveness and attractiveness of the overall customer proposition”,- noted Jan Dunning, President and CEO of Magnit.