Press-Release | Krasnodar | October 21, 2020
Magnit Leases Pool of Former Intertorg Stores
Krasnodar, Russia (October 21, 2020): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers, has signed long-term lease agreements for 77 retail facilities previously occupied by stores operated by TD Intertorg under the Family and Spar brands.
All stores leased by the Company are located in the Northwestern Federal District. Most of them (75) are in Saint Petersburg and Leningrad region, one is in Veliky Novgorod, and another one is in the Republic of Karelia. Their total area is more than 42,000 sq. m, while the selling space exceeds 31,000 sq. m. As a result, Magnit's selling space in the region increased by almost 4% compared to the end of 2019. The lease agreements are concluded for a period of 7 to 10 years.
The Company has already used the leased space to open 61 Magnit convenience stores and 15 Magnit Cosmetic stores. In addition to that, in the nearest future, Magnit will open one Magnit Family supermarket and one more convenience store. At the end of the 3rd quarter of 2020, Magnit had in total 916 stores in Saint Petersburg and Leningrad region.
Saint Petersburg is a metropolis with the most developed retail market in Russia and the country's leader in terms of penetration of modern food retail formats. At the same time, the share of Magnit in this region has been historically not high. The lease of former Intertorg stores will support the Company's development in Saint Petersburg and Leningrad region, where The Company sees significant potential for business growth.
"Since the beginning of the year, we have reinforced the Company's position in the region, primarily in the convenience format. We have managed to secure several dozen attractive locations across the Northern Capital and the region, which are well suited to our development strategy in terms of their size and layout. The Northwestern region and Saint Petersburg in particular represent one of the priority areas for the development of our chain. Since the beginning of the year, LFL sales of Magnit stores in the region show the highest growth rate-more than 10%. We are happy to see a keen customer response to our new value proposition. It is worth noting that we are replacing existing stores, which allows us to quickly pick up the already developed traffic in these high-quality locations. Another important factor is the growing density of our retail network in the region, which has a positive impact on logistics costs when planning routes,"-commented Jan Dunning, President and CEO of Magnit.
For further information, please contact:
Director for Investor Relations
Office: +7 (861) 210-48-80
Director for Investor Relations
Office: +7 (861) 210-9810 x 15101
Note to editors:
Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2020, Magnit operated 38 distribution centres and 20,894 stores (14,581 convenience, 472 supermarkets and 5,841 drogerie stores) in 3,710 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the reviewed IFRS 16 management accounts results for 1H 2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.
This document contains forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.