'Walmart eager to buy Russia's 5th retail chain Karusel'

'Walmart eager to buy Russia's 5th retail chain Karusel'

According to Russian business sources, Walmart is interested in buying hypermarket chain Karusel from the X5 retail holding. In doing so, the world's leading retailer would finally realise its dream to enter the Russian market.

"Deal announced in two weeks"

The Develoi Peterburg newspaper writes that Walmart would buy Karusel for two billion dollar from X5, who have owned the hypermarket chain since 2008. Reuters quoted the DP saying “a deal may be announced in around two weeks.”

 

An X5 spokesman formally denied these reports, but analysts believe in the possibility of Walmart taking over Karusel, as the main holding struggles financially after acquiring discount chain Kopeyka. X5 bought the discounter just before Walmart could, but Kopeyka's integration in the holding has proven more difficult than expected. Last October, the group even issued its first profit warning, despite the boom the Russian economy is still going through.

 

"Acquisition is the only way in"

Walmart has been trying to enter the Russian market for years, but it seemed to have given up hope after the group closed its Moscow office in 2010, citing “a lack of acquisition opportunities”. However, spokesman Kevin Garner said "We still believe the Russia market has promise and we'll continue, as we do in markets all over the world, to watch for the right market-entry opportunity."

 

Speculations surfaced again as Walmart appointed X5's former CEO Lev Khasis as senior vice-president last year, especially after Khasis told a Russian tv station that "the only way of entering the Russian market now is buying some of the existing players".

 

Two other candidates: Lenta and O'Key

Analysts point out that Karusel is not the only possible candidate for a Walmart takeover. The Lenta-chain, in American hands since the Texas Pacific Group took over last year, has 42 Russian stores to offer to the world leader in retail. Its colleagues of O'Key, despite the name a completely Russian chain, would also be an interesting target for foreign investors.

 

O'Key, Lenta and Karusel are by far the biggest Russian retail chains, with a turnover of 1.70 billion, 1.41 billion and 1.36 billion euro respectively. That puts them way ahead of the other Russian chains, but also far behind the two largest, but foreign, retailers in Russia: French Auchan (4.14 billion) and German Metro (2.90 billion).

Questions or comments? Please feel free to contact the editors


C&A divest from Russia

18/07/2017

Textile chain C&A will fully divest from Russia. It currently collaborates with Russian Trade Group to manage its local store network, but it has pulled the plug on that deal. Mexx has also decided to shut down every Russian store.

Zalando reveals Prime-like subscription service

18/07/2017

In the second quarter of 2017, web shop Zalando’s turnover did not grow as much as it did in previous quarters, according to the company’s preliminary results. Zalando also announced a new subscription service.

Björn Borg opens new flagship stores in Belgium and the Netherlands

18/07/2017

Swedish Björn Borg will open new flagship stores in Belgium and the Netherlands sometime this year. It is the next step in its expansion plan after having opened new stores in Bruges, Haarlem and Zwolle.

New owner for Havaianas

14/07/2017

Brazilian Alpargatas, known for its famous Havaianas slippers, has a new owner. Investment firm J&F Investimentos sold its majority stake to three Brazilian banks.

Tiffany & Co appoints new CEO

14/07/2017

Jewelry chain Tiffany & Co appointed Alessandro Bogliolo as its new CEO, succeeding Frederic Cumenal who left the company five months ago. However, Bogliolo will only take over on 2 October.

C&A suffers another loss in Belgium

14/07/2017

In 2016, clothing chain C&A once again suffered a blow in Belgium. The Dutch company suffered a turnover drop, but also had to deal with a loss for the second straight year.

Back to top