Press Release | Krasnodar | November 25, 2020
Magnit Tests Magnit Cosmetic Mini Format
The Company opened the first Magnit Cosmetic mini format store with a selling space of about 65 sq. m in Moscow on the basis of a Magnit Convenience at 126 Pervomayskaya St. The cosmetics store, which offers customers around 4,000 products, will enlarge the customer proposition of Magnit Convenience store, ensuring higher customer loyalty and enhancing sales density of the main format.
Krasnodar, Russia (November 25, 2020): Magnit PJSC (MOEX and LSE: MGNT; the Company), one of Russia's leading retailers, is testing the mini format of its Magnit Cosmetic to seamlessly integrate it into existing convenience stores in economically efficient locations. Magnit cosmetic is a separate store with a corporate design maintaining continuity of drogerie format. The outlet has its own personnel and a unique assortment matrix differentiated from that of convenience stores. Magnit cosmetic stores target a female audience and offer a selection of products that includes perfumes, decorative and care cosmetics, hair care products, manicure and pedicure supplies, accessories, and other goods.
According to the current concept, Cosmetic stores will have from 40 to 70 sq. m of selling space. By the end of 2020, the Company may expand its pilot with several more stores and increase the total number to seven outlets in Moscow and the regions. Magnit Cosmetic mini format stores will be opened in those locations where it is impossible to open a classic Magnit Cosmetic and where the selling space of convenience stores allows it, as long as there is no cannibalization with existing drogerie outlets.
As of now, Magnit Cosmetic is the most dynamic and successful format of the Company that shows positive LFL. The format's share in Magnit retail sales is constantly growing and stood at 9.4% in 3Q 2020. Driven by the increase in selling space and LFL sales growth, sales grew 21.8% representing the strongest performance among all Magnit's store formats. Magnit Cosmetic mini format pilots will allow the Company to assess the demand for a new customer proposition, increase the number of customer touchpoints, and boost its sales.
"We are currently working on various expanding options of our customer proposition. Having analysed the best experience of Magnit Cosmetic, we apply it to the pilot of Magnit Cosmetic stores. We will see how customers like the mini drogerie format and based on the results, will be able to say where and how we are going to develop it," - commented Ruslan Ismailov, Magnit Deputy CEO - Retail Chain Director.
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Note to editors:
Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of September 30, 2020, Magnit operated 38 distribution centres and 21,154 stores (14,699 convenience, 469 supermarkets and 5,986 drogerie stores) in 3,819 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the unaudited IFRS 16 management accounts results for 1H 2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.
This document contains forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.