will continue to support its competitive position and business strategy going forward. These competitive advantages
include:
Leading market position in a highly attractive, large and growing market
? Fix Price was estimated to account for 93% of variety value retail sales in Russia in 2019, according to an
independent industry consultant report, making it 13 times larger than other players on the Russian variety value
retail market combined, and had by far the largest number of stores among Russian variety value retailers.
? Fix Price believes that it pioneered and scaled the variety value retail concept in Russia, and therefore has a
first-mover advantage, as a result of which it currently operates in a market that is characterised by significant
barriers to entry to new competitors.
? Fix Price's leading market position enables it to drive the development of the variety value retail market in
Russia and neighbouring countries, drawing upon a globally proven concept which has demonstrated significant growth
over the past decade.
? The Fix Price business proposition addresses a material and fast-growing market, which is underpinned by a sizeable
population of over 249 million (in Russia, other CIS countries, Georgia and Latvia - the geographies comprising Fix
Price's expansion focus).
? On the back of structural shift in consumer behaviour towards value, in 2017-2020, the Russian variety value retail
market, measured by sales, grew at a CAGR of 23%. Fix Price sees substantial further upside supported by the
significant level of under-penetration today.
A unique customer value proposition
? Fix Price offers its customers deep value across a diverse, unique and constantly renewed product assortment,
satisfying their needs for everyday essentials while providing an engaging "treasure hunt" experience. Fix Price's
loyalty card programme brings additional value to customers through a number of attractive benefits.
? The elements of this unique customer value proposition include:
? Deep value across a diverse product offering. Fix Price strives to offer outstanding value via an
uncompromising "every day low price" strategy across several highly competitive anchor price points, all under
RUB 250 (c. USUSD 3.40). As of 31 December 2020, c.80% of the Company's product assortment was priced under RUB
100 (c. USUSD 1.3). Fix Price sells a broad range of products across approximately 1,800 SKUs in approximately 20
different categories, including household goods, cosmetics and hygiene, stationery and books, clothes, toys,
household chemicals, as well as shelf-stable food and drinks. Fix Price maintains a diversified mix of own
private brands, branded and non-branded (no-name) products.
? Constant newness and rapid time to market. A continuously refreshed product offering is at the core of Fix
Price's assortment strategy. Fix Price launches 40 to 60 products every week, many of which are driven by
seasonal occasions and latest retail trends, with approximately 60% of assortment in SKU terms being rotated up
to six times per year. Fix Price's own private brands are developed in-house by dedicated procurement and
design teams that continuously monitor the market for best-selling goods, collaborating closely with Fix
Price's suppliers to deliver quality products at the right time, at strategic price points and with target
profitability.
? Convenient shopping experience and an exciting "treasure hunt". Fix Price seeks to open its stores in locations
it believes benefit from convenience of access and high traffic. Fix Price constantly renews its assortment to
create an element of discovery and "treasure hunt" experience for its customers. This encourages repeat visits
fuelled by the search for exciting novelties. According to a study by Marketing Agency Vector, a marketing
consultancy, Fix Price enjoys a high Net Promoter Score of 60%.
? Fast-growing loyalty programme with highly attractive benefits. Fix Price's "Bonus Card" loyalty programme has
approximately 12 million registered card holders. Approximately 36% of Fix Price's retail sales in 2020 were
generated from sales of products to Fix Price's loyalty programme card holders, creating a "win-win" for the
customers and Fix Price.
Operational excellence: standardisation, tech-enabled automation and agile sourcing
? Fix Price believes that its efficient operational model driven by lean decision making and nimble management
approach greatly benefits from standardisation of its store network, highly automated operations, centralised
logistics and efficient procurement as follows:
? Fully standardised leased store portfolio driving outstanding unit economics. Fix Price has standardised its
entire network of stores in terms of pricing, product assortment, product layout, equipment and marketing. Fix
Price believes that the standardisation of its stores drives value, convenience and a great experience for Fix
Price customers. At the same time, standardisation reduces the complexities of running Fix Price's vast store
portfolio, allows it to make efficient purchasing decisions and contributes to the efficiency of its
operations.
? Agile sourcing model and long-standing relationships with suppliers. Fix Price's efficient, agile and
streamlined sourcing model translates into the ability to offer a constantly changing and carefully crafted
product assortment, delivering deep value to its customers and strong margins to the business. Fix Price has
developed long-standing, direct and collaborative relationships with over 600 local and international
suppliers. Fix Price's procurement team works closely with these suppliers to continuously create new and
on-trend products to meet the evolving tastes and needs of its customers. Fix Price believes that the sheer
scale of its business and purchasing volumes make it a highly relevant partner to its suppliers.
? State-of-the-art IT infrastructure, translating into better decision-making and decreased costs. Since the
inception of Fix Price, its IT infrastructure has been designed for scale, and today supports all key facets of
decision-making within its business. The high degree of tech-enabled automation of store-level processes allows
Fix Price to effectively run the entire network as a single store and to further scale it without significant
expansion of HQ personnel or significant additional investments in IT infrastructure.
? Logistics infrastructure scaled for growth. The design of Fix Price's logistics infrastructure is highly
strategic in supporting a portfolio of more than 4,200 stores. Operating across 78 out of 85 regions in the
world's largest country by land size, Fix Price's logistical infrastructure is critical to the success of its
business model. As of 31 December 2020, Fix Price had eight distribution centres. Fix Price's logistics
infrastructure is nearly 100% centralised.
Leading financial KPIs among best-in-class peers
? Fix Price believes it enjoys leading revenue growth, profitability and ROIC levels among publicly traded variety
value retailers globally (namely, Dollar General, Dollar Tree, Five Below, Ollie's, Grocery Outlet, Dollarama, B&M
and Dino), based on their publicly reported financial information.
? Fix Price's outstanding revenue growth at a CAGR of 32.2% in the three years ended 31 December 2020 is driven by
both rapid network expansion, with more than 1,690 increase in store count over the period of three years since 31
December 2017 and robust like-for-like sales growth averaging 19.0% for the last 16 quarters ending 31 December
2020.
? A combination of high sales densities, low operating expenses and asset-light business model enables Fix Price to
achieve superior returns on capital, with a market leading ROIC among publicly traded variety value retailers
listed above of 98% in 2020 (estimated by reference to their publicly reported financial information).
Visionary management team - experienced, dedicated and incentivised
? Fix Price's visionary founders, Sergey Lomakin and Artem Khachatryan, who will also be on the Board of Directors at
the time of Admission, launched Fix Price in 2007 in order to create the largest retailer in the variety value
retail market. Having the benefit of substantial prior experience in discount and non-food retailers, they
channelled their passion of bringing the variety value retail concept to the Russian consumer to drive the rapid
growth of Fix Price over the past 13 years.
? The overwhelming majority of Fix Price's top executives started working together with Sergey Lomakin and Artem
Khachatryan at the initial stage of Fix Price's development in 2007-2009. The Fix Price management team, led by the
CEO, Dmitry Kirsanov, has multi-year experience in retail across a broad range of disciplines, including
merchandising, marketing, real estate, finance, store operations, supply chain management and information
technology.
Media enquiries
EM (communications advisor to Fix Price)
Denis Denisov Peter Morley Dmitry Zhadan
denisov@em-comms.com morley@em-comms.com zhadan@em-comms.com
+7 985 410 3544 +43 676 684 5252 +7 916 770 8909
Fix Price
pr@fix-price.ru
Important legal information
The information contained in this announcement is for background purposes only and does not purport to be full or
complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or
its accuracy, fairness or completeness.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States (MORE TO FOLLOW) Dow Jones Newswires
March 01, 2021 02:00 ET (07:00 GMT)
