Arcandor Sees Russia Becoming Top Mail-Order Market
Arcandor AG, the owner of Karstadt department stores and the Quelle catalog company, said Russia may become its largest overseas mail-order market next year as sales surge in the country.
The retailer’s annual sales in Russia may reach 1 billion euros (USD 1.58 billion) in 2013, said Marc Sommer, the head of Arcandor’s Primondo mail-order unit. Primondo’s Russian sales may rise 57 percent to USD 180 million this year and will increase by about 60 percent annually through 2010, he added.
“The mail-order market is undergoing a boom in Russia,” Sommer said today at a press conference in Moscow. “People begin to realize how convenient it is to order by catalog and get goods delivered to your home.”
Arcandor’s Russian mail-order sales have more than doubled annually since it entered the market with Quelle in 2005. Russia’s apparel and footwear market will increase by 16 percent to 37 billion euros this year and may reach 55 billion euros in 2011, Sommer said today at a company presentation.
“People are buying European fashion very eagerly,” Sommer said. Rising incomes in Russia, the world’s biggest energy supplier, fuel consumer spending and lure international companies such as Inditex SA, Europe’s largest clothing retailer, and Stockmann Oyj, a Finnish department-store company. Hennes & Mauritz AB plans first Russian stores in 2009.
Arcandor AG, the owner of Karstadt department stores and the Quelle catalog company, said Russia may become its largest overseas mail-order market next year as sales surge in the country.
The retailer’s annual sales in Russia may reach 1 billion euros (USD 1.58 billion) in 2013, said Marc Sommer, the head of Arcandor’s Primondo mail-order unit. Primondo’s Russian sales may rise 57 percent to USD 180 million this year and will increase by about 60 percent annually through 2010, he added.
“The mail-order market is undergoing a boom in Russia,” Sommer said today at a press conference in Moscow. “People begin to realize how convenient it is to order by catalog and get goods delivered to your home.”
Arcandor’s Russian mail-order sales have more than doubled annually since it entered the market with Quelle in 2005. Russia’s apparel and footwear market will increase by 16 percent to 37 billion euros this year and may reach 55 billion euros in 2011, Sommer said today at a company presentation.
“People are buying European fashion very eagerly,” Sommer said. Rising incomes in Russia, the world’s biggest energy supplier, fuel consumer spending and lure international companies such as Inditex SA, Europe’s largest clothing retailer, and Stockmann Oyj, a Finnish department-store company. Hennes & Mauritz AB plans first Russian stores in 2009.
Eastern Europe
Essen, Germany-based Arcando is relying on sales in eastern Europe and Russia to revive profitability at Primondo, Chief Executive Officer Thomas Middelhoff said April 3. The unit’s nine-month loss before interest, taxes, depreciation and amortization was unchanged at 73 million euros, while revenue rose 4 percent to 2.89 billion euros, about a fifth of total sales, Arcandor reported Jan. 30.
Arcando’s Quelle is the largest mail-order company in Russia and competes with Otto Group, a German mail-order retailer, locally, according to Sommer.
Both Arcandor’s Karstadt department store unit and Thomas Cook tourism division are interested in entering the local market “after Primondo’s success,” Sommer said today.
Arcandor is looking for locations to open as many as three luxury department stores in St. Petersburg and Moscow, according to the executive.
Thomas Cook may announce the set up of a Russian unit in cooperation with a domestic partner before the end of the year, he said.
Russia’s USD 421 billion retail industry will expand about 17 percent annually through 2012, and sales of non-food products will outpace the market and gain on average 24 percent per annum, according to Renaissance Capital investment bank.
Arcandor’s shares fell 48 cents, or 3.8 percent, to 12.07 euros in Frankfurt today. The shares have fallen by more than a quarter this year, reducing the company’s market value to about 2.8 billion euros.
