Magnit Leases Pool of Former Intertorg Stores
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.