posted by Bina | Monday, July 16, 2007
Kingfisher plans to open 50 stores in Russia at a cost of about £250m over the next 10 years, with the aim of becoming market leader in the estimated £10bn-a-year Russian home improvement market.
The UK-based do-it-yourself group has four stores already in Russia, trading under its Castorama banner, after entering the market last year. A fifth is due to open in September and it plans to double the total to 10 next year.
"The population are very hungry [for DIY goods] and have a lot of projects to finish in their apartments and houses," Oleg Pisklov, managing director of Castorama Russia, told an investor meeting in Moscow last week.
"We want to have up to 15 stores in Moscow, five in St Petersburg and a couple of big box stores in each regional city."
The announcement highlights the attractions of the fast-growing Russian consumer market.
It also shows that UK companies are still ready to invest, despite worsening political relations and last month's decision by DSG, Britain's biggest electrical retailer, to abandon the planned purchase of Eldorado, Russia's leading electrical goods retailer.
Kingfisher's plans are among the most ambitious announced so far by a British group. But several already have a Russian presence, often through franchises, including Marks and Spencer, BHS and Mothercare.
A construction boom is fuelling demand for DIY goods, with more than 50m sq m of housing added last year, the equivalent of more than 700,000 typical-sized apartments. Rising incomes are also enabling Russians for the first time to renovate crumbling Soviet-era apartments.
Natalia Morozova, Castorama Russia's marketing manager, told investors that DIY retailing had more potential now than grocery retailing, since it was three to four years behind in its development.
There are also few strong home-grown competitors in Russian DIY, unlike in groceries or electrical goods.
Germany's OBI and France's Leroy Merlin have both established a strong presence in the Moscow DIY market.
Source : www.ft.com
The UK-based do-it-yourself group has four stores already in Russia, trading under its Castorama banner, after entering the market last year. A fifth is due to open in September and it plans to double the total to 10 next year.
"The population are very hungry [for DIY goods] and have a lot of projects to finish in their apartments and houses," Oleg Pisklov, managing director of Castorama Russia, told an investor meeting in Moscow last week.
"We want to have up to 15 stores in Moscow, five in St Petersburg and a couple of big box stores in each regional city."
The announcement highlights the attractions of the fast-growing Russian consumer market.
It also shows that UK companies are still ready to invest, despite worsening political relations and last month's decision by DSG, Britain's biggest electrical retailer, to abandon the planned purchase of Eldorado, Russia's leading electrical goods retailer.
Kingfisher's plans are among the most ambitious announced so far by a British group. But several already have a Russian presence, often through franchises, including Marks and Spencer, BHS and Mothercare.
A construction boom is fuelling demand for DIY goods, with more than 50m sq m of housing added last year, the equivalent of more than 700,000 typical-sized apartments. Rising incomes are also enabling Russians for the first time to renovate crumbling Soviet-era apartments.
Natalia Morozova, Castorama Russia's marketing manager, told investors that DIY retailing had more potential now than grocery retailing, since it was three to four years behind in its development.
There are also few strong home-grown competitors in Russian DIY, unlike in groceries or electrical goods.
Germany's OBI and France's Leroy Merlin have both established a strong presence in the Moscow DIY market.
Source : www.ft.com
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