Oct 23, 2014
Russia's Sistema buys stake in fashion retailer
Oct 23, 2014
MOSCOW, Russia - Russian oil-to-telecoms conglomerate Sistema has acquired a minority stake in mass-market clothing company Concept Group, increasing its exposure to the fast-growing retail market.
The deal, worth around 1 billion roubles ($24 million), also gives Sistema an option to increase its holding and take control of the fashion clothing retailer within three years.
An economic slowdown and a slump in the rouble amid Western sanctions over Moscow's role in the Ukraine crisis have taken a toll on consumption but while people delay making large purchases, such as cars, retailers of food and affordable apparel traditionally prove more resilient in downturns.
Sistema, whose key assets are Russia's biggest mobile operator MTS and oil firm Bashneft, already owns Russia's top children's goods retailer Detsky Mir and a stake in online retailer Ozon along with dozens of assets in industries ranging from banking to transportation.
"The Russian clothing market has been developing rapidly over many years and has high potential for organic and non-organic growth," Mikhail Shamolin, Sistema CEO, said in a statement announcing the deal.
Founded in 2004, Concept Group develops and sells women's clothing, accessories, lingerie and children's wear through its own and franchised stores, the Internet, and through wholesale.
Its 287 stores generated more than 5 billion roubles in revenues last year, a year-on-year increase of almost 40 percent, according to Sistema's statement. Sistema made around $36 billion in 2013 sales.
Shares in Sistema were down around 2 percent by 1230 GMT, extending a more than 60 percent fall since mid-September when its chairman and main owner Vladimir Yevtushenkov was accused of money-laundering in connection to Bashneft acquisition in 2009.
A Moscow court is scheduled to hear in a lawsuit filed by the Russian prosecutor general's office, seeking to restore Bashneft to state ownership, on Thursday.
1 US dollar = 41.0240 Russian roubles
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