St. Petersburg, Russia, 2017-Jul-31 — /EPR Retail News/ — Lenta Ltd, (LSE, MOEX: LNTA / “Lenta” or the “Company”), one of the largest retail chains in Russia, is pleased to announce signing of agreements with MCapital and OTZR for long-term leases of hypermarkets in Moscow and Russian regions, currently operated under the NASH brand.
The agreements contemplate a 15-year arrangement for 14 hypermarkets in Moscow and the Russian regions, currently operated under the NASH brand with the total selling space of approximately 78,400 sq.m. This includes seven hypermarkets with total selling space of around 43,600 sq.m located in Moscow and another seven hypermarkets with total selling space of around 34,800 sq.m located in the Moscow region, Nizhniy Novgorod, Chelyabinsk, Perm, Ryazan, Yaroslavl and Rostov-on-Don. The average size of the stores is around 5,600 sq.m of selling space. The stores are compatible in terms of size and layout with existing Lenta standard, compact and supercompact hypermarket formats, and locations are complementary to Lenta’s existing stores.
Lenta’s Chief Executive Officer, Jan Dunning said:
“We are very pleased to have reached agreement with MCapital and OTZR based on a partnership approach, beneficial to both parties, to lease hypermarket locations in Moscow and the regions to Lenta. While Lenta remains primarily focused on its organic expansion, we continue to pursue strategic opportunities in parallel.
The stores all have good urban locations and complement Lenta’s existing network. The hypermarkets have well-trained personnel, so Lenta looks forward to welcoming NASH store employees into its family. As part of the transaction Lenta will also acquire the existing store equipment.
We have a very strong track record of successful integration and are confident this deal will significantly strengthen Lenta’s network in Moscow, where we currently operate 13 hypermarkets, and will complement our offering in each of the other regions. Upon the completion of integration, the stores will operate under the Lenta brand.”
Approvals and integration
The agreements have been approved by the Lenta Board, no further internal approvals are necessary. The transaction does not require any regulatory approvals.
The Company intends to invest in renovation of the sites to match Lenta’s standards and offer customers the high quality shopping experience they expect from Lenta. All the stores will be closed for renovation for a short period, then re-opened under the Lenta brand. The openings under the Lenta brand are planned to be completed within approximately two months.
Lenta will provide more details and revised store opening guidance at a later stage.
Lenta is the largest hypermarket chain in Russia (in terms of selling space) and the country’s fifth largest retail chain (in terms of 2016 sales). The Company was founded in 1993 in St. Petersburg. Lenta operates 195 hypermarkets in 78 cities across Russia and 59 supermarkets in Moscow, St. Petersburg, Novosibirsk and the Central region with a total of approximately 1,173,416 sq.m of selling space. The average Lenta hypermarket store has selling space of approximately 5,700 sq.m. The average Lenta supermarket store has selling space of approximately 900 sq.m. The Company operates seven owned distribution centres.
The Company’s price-led hypermarket formats are differentiated in terms of their promotion and pricing strategies as well as their local product assortment. The Company employed approximately 45,689 people as of 31 December 2016.
The Company’s management team combines a mix of local knowledge and international expertise coupled with extensive operational experience in Russia. Lenta’s largest shareholders include TPG Capital and the European Bank for Reconstruction and Development, both of which are committed to maintaining high standards of corporate governance. Lenta is listed on the London Stock Exchange and on the Moscow Exchange and trades under the ticker: ‘LNTA’.
A brief video summary on Lenta’s business and its Big Data initiative can be seen here.
Forward looking statements:
This announcement includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “expected”, “plan”, “goal”, “believe”, or other words of similar meaning.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, a number of which are beyond Lenta’s control. As a result, actual future results may differ materially from the plans, goals and expectations set out in these forward-looking statements.
Any forward-looking statements made by or on behalf of Lenta speak only as at the date of this announcement. Save as required by any applicable laws or regulations, Lenta undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this document that may occur due to any change in its expectations or to reflect events or circumstances after the date of this document.
For further information please visit www.lentainvestor.com
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