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Investors become interested in shoe retail
28.04.2011 2231

Investors become interested in shoe retail

At the end of March, the annual forum of the Adam Smith Institute “Russian Retail Trade” was held in Moscow. During the session “Evaluation and Analysis of New and Existing Strategies and Ideas,” the director of the Obuv Rossii group of companies told why investors after the crisis became interested in shoe retail.

According to Anton Titov, before the crisis, the shoe market was underestimated by investors: “Then everyone invested in more developed retail segments, such as food retail, mobile retail, and household appliances trade. However, these markets no longer have the same growth potential as before, since they are almost completely consolidated. The crisis has shown the sustainability and prospects of new markets, such as shoe retail. Shoes are essential goods and take second place after food. Despite the fact that the market dipped by 15 – 20% in the 2009 year, it recovered quite quickly in the 2010 year. According to experts, in the next few years the shoe market will grow by 10 – 12% annually. And such dynamics of the shoe market cannot but interest investors. In 2010, a number of large shoe retailers resumed network growth, which is no coincidence. The shoe market today is poorly consolidated and undersaturated, so there are huge opportunities for enlarging networks and developing new regions. The market potential is large, which is explained by the predicted growth in consumption. Today, a Russian purchases an average of 2,8 pairs per year. In this indicator, we are far behind Europe (four to five pairs) and the United States (six to seven pairs). However, given the pronounced seasonality, we have a potential for growth in consumption - at least up to 4,5 – 5 pairs.

All these factors determine the growing interest in the shoe market from investors. In 2010, the UCP investment fund bought back 36% of the shares of the Monarch group of companies. This spring, the largest shoe retailer in Russia, TsentrObuv, announced plans for an IPO. ”

According to A. Titov, Obuv Rossii also plans to actively work on the open capital market and attract external financing. In the first half of the year, the company intends to place bonds in the amount of 700 million rubles. These funds, along with the company's own funds in the ratio of 50X50, will be used to finance the investment program until the 2015 of the year, according to which Obuv Rossii plans to increase its net revenue from 1,6 billion by the end of the 2010 year to 7,5 billion by the end of the 2014 year and expand the network with 120 to 450 stores.

“The most promising now is the mid-price segment, whose share in the shoe market is 30%, and it will continue to grow. This is because the purchasing power of precisely that part of the population that has average incomes will grow. These are people who can afford to buy good shoes and consider it not just as a product, but as part of a lifestyle. Given these trends in changing consumer behavior, shoe companies will invest more in brand development and building long-term relationships with customers. In our development program, we also rely on strengthening brands and developing large-scale marketing campaigns that include offering non-standard services for the market (such as installment shoes), ”A. Titov explained.

По материалам сайта Altapress.ru
At the end of March, the annual forum of the Adam Smith Institute “Russian Retail Trade” was held in Moscow. During the session “Evaluation and analysis of new and existing strategies and ideas,” the group director ...
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