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Modern trading platform, marketplace, ecosystem of services

In October 2017, our company held an IPO on Moscow Exchange becoming the first publicly traded company on the Russian fashion retail market.

Anton Titov
CEO of Obuv Rossii Group

In 2019 we strengthened our leader positions on the Russian market: we launched over 200 stores (the net growth of the retail chain was 181 store considering the relocation and closing of some retail outlets) and entered 125 new cities and towns. We accelerated the growth rates and increased our proceeds by 18.6% up to RUB 13.7 bln.

We succeeded in increasing business process efficiency and showed high profitability: EBITDA grew by 25.5% up to RUB 3.583 bln, EBITDA profitability in 2019 was 26.1%. The net profit grew by 26.7% up to RUB 1.687 bln. Improving the profitability and efficiency will remain priority tasks for us in the near future.

It is worth mentioning that in 2019 we finished the implementation of a three-year investment program announced in 2017. We fulfilled all the declared plans having doubled our retail chain in two years and entered 220 new towns. The main aim for us in 2020 is to ramp up the outlets opened in the previous two years. Proceeds and profitability in the retail chain will increase due to the growth of such quality indices as proceeds per square meter, conversion ration and like-for-like sales.

We gradually pass to the multicategory store format, develop the shoes range including the lines of both classical and casual style, sports shoes. We offer collections of women’s and men’s clothes and also enter some new segments. This all allows us to increase the market capacity and to grow sales on the shopping capacities we have. In 2019, related product sales in our stores increased by 15.9%, their share in the retail proceeds amounted to 39.2%. In 2020 we plan to increase the share of such products up to 50%.

To achieve an increase in the main business indices of the company, we decided to improve our business model. In the context of the online retailing boost and customer behaviour changes, we see big prospects in the integration of offline retail and online sales channels. In November 2019 we announced a new approach: we started to work with our suppliers using the marketplace model having provided up to 50% of our shopping floor space for partner brand products. To cooperate with the suppliers, we started the Prodayom online platform. In the first quarter 2020, the turnover of the platform exceeded RUB 1 bln.

Our mid-term aim is to transform our business to become online integrating our retail chain to be an online sale infrastructure. The online store will become the main point of sales for us while offline stores will perform the role of service points.

To date, about 2,000 partners’ pickup points is operating in our stores. We are cooperating with eight partners, PickPoint, DPD, Russian Post, Sberlogistika, OZON are among them. In 2020 we delivered more than 400 ths. parcels through partner pickup points, in 2020, we plan to increase these indicators. We also intend to involve into the project all logistics operators that provide the customers the «last mile» service with the help of pickup points.

The development of online sales is one of the top-priority directions for the near future. In 2019 their share in the retail revenue was 14.8%. We are developing the cooperation with online marketplaces such as Wildberries, Lamoda, Tmall. In March 2020, we launched in the test mode an online marketplace based on the online store of our main brand It will be possible to buy goods from a variety of stock which is not available in the retail chain.

We will continue to develop the services of our company since it makes a considerable contribution into the growth of key indicators. Thus, the revenue from cash loans increased by 40% in 2019. This year, we will implement technologies to manage financial services: we are planning to develop a customer’s account, launch a simple electronic signature mechanism to allow for the execution of instalment contracts, etc. All this will allow us to develop online financial services in future. 

Sincerely, Anton Titov,
CEO of Obuv Rossii Group

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