Kingfisher plans to invest aggressively in Russia
From: Bloomberg
Kingfisher Plc, Europe s largest home-improvement retailer, will invest aggressively in Russia, where the market is set to return to growth in the second half, Chief Executive Officer Ian Cheshire said.
The London-based retailer, which has 13 Castorama stores in Russia, plans to open a smaller outlet in Moscow within the next 18 months, Cheshire said in an interview in the Russian capital today. Kingfisher may use small-format stores as a test prior to openings in other European countries, he said.
There is clearly an opportunity to open more stores in Russia and Poland than the four and six per year now targeted respectively for the two countries, the CEO said. We expect Russia to be one of the highest growth markets in the world over the next five years, he said.
The Russian home-improvement market may expand between 10 percent and 15 percent this year after being difficult over the last 12 months, Cheshire told reporters at a press conference. The retailer spends 30 million pounds ($44 million) to 50 million pounds a year in the country and may invest more if there are opportunities, the executive said in the interview.
Kingfisher doesn t rule out possible purchases in Russia if there is an opportunity to acquire an interesting site through an acquisition, the CEO said.
The smaller format being tested will have about 60 percent of the retail space of the chain s normal outlets, with a full range of products but less stock. If successful, the new format may be used in other countries, particularly in Poland, Peter Hogsted, Kingfisher s international director, said in July.
The retailer plans to open a distribution center in Poland in the second half, which will allow it to bring in more group-sourced products and improve margins, Cheshire said today. It s a big three to five year opportunity, he said.
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