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In 2020, Obuv Rossii Will Focus on Enhancing Retail Efficiency

Obuv Rossii Group, the first publicly traded company in Russian fashion retail, presented its development tasks for 2020. The Group will focus on enhancing the retail efficiency and will operate in three main lines: stock development, increasing the service component of the business and improving the services including postal ones, raising online sales due to own online stores and third-party online marketplaces. All this will allow the Company to ensure key performance indicators growth (revenue, gross and net profit, EBITDA) with the same retail chain as now.

“Since 2017, the Company has expanded its chain two times, from 452 to 915 stores. As a result, we have fulfilled all plans we announced during the initial public offering in October 2017. For the past two years, we have entered over 200 new cities and towns having now a vast geographical footprint and presenting in all main regions of Russia,” Anton Titov, CEO of Obuv Rossii Group, comments. “Such business sizes allow us to solve the main tasks that we set for the near future – enhancing the efficiency of our retail, growth of revenue per square meter; production cost reduction; increasing of the loyal customer audience. We will concentrate on the growth of operating and financing performance and on ramp-up of sales outlets opened within two years since IPO.”

An important task for 2020 is stock diversification and development of additional product groups. The stock of related products in Group’s stores includes over 8,000 SKUs. In 2020, Obuv Rossii plans to expand the range of goods two times which will enable the Company to increase the average ticket size and the complex purchase share, to attract additional traffic, to enhance customer loyalty and to smooth the seasonality characterizing shoe retail. According to the results of nine months of 2019, the related products share made up 36.5% in the Company’s retail proceeds. It is planned to increase this share up to 50% in 2020.

The second line is the development of additional services in Obuv Rossii’s stores. Now the customers are offered such services as instalment payments, cash loans, payment for services at the cash desk, etc. The services are combined within an innovation loyalty program called Arifmetika, which is implemented on the base of payment cards. Currently, the number of card holders is over 2.45 mln people. A new service has been offered in Obuv Rossii stores since November 2018 – customers can pick up online orders of third-party online stores in the Company’s sales outlets. There are pickup points of seven partners in Group’s stores: Ozon, PickPoint, DPD, Hermes, PEC, Boxberry and Russian Post. Only in November 2019, the Company delivered more than 75 thousand parcels. In 2020, Obuv Rossii plans to increase the list of their partners and the number of stores involved in the project. Development of the service component of the business makes it possible to attract additional traffic (the share of clients that come to pick up parcels made 2.5% of the total store traffic according to the results of October 2019), to get an additional revenue source, and to increase business profitability.

The third line is increasing online sales. The Company will develop both their own mono-brand online stores of the Group’s retail chains and foster the cooperation with the leading marketplaces such as Wildberries and Lamoda. In December 2019, Obuv Rossii entered Tmall (part of Aliexpress Russia). In 2020, the Company will develop the mobile sales channel – an updated mobile application of the main Westfalika brand will be launched.

Improvements in all these directions will enable the company to solve the main task for 2020 to increase efficiency, revenue and profitability of the exciting retail chain.

In early 2020, Obuv Rossii will present the development strategy for the nearest 3 or 5 years. 

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