Magnit (Магнит, "Magnet") is one of Russia's largest food retailers.[2] It was founded in 1994 in Krasnodar by Sergey Galitsky. As of March 2016, the company had 12,434 stores in 2,385 locations. They include 9,715 convenience stores, 225 hypermarkets, 2,337 Magnit Cosmetics stores and 157 Magnit family stores.[3] The company employs more than 140,000 people and has been opening several dozen stores each month.

PJSC Magnit
Native name
ПAO "Магнит"
TypePublic (PAO)
MCXMGNT
LSEMGNT
IndustryRetail
Founded1994; 27 years ago (1994)
FounderSergei Galitsky
HeadquartersRussia,
Number of locations
18,399 (2018)
Key people
Jan Dunning (CEO)
ProductsConsumer goods
Revenue$21.5 billion[1] (2020)
$5.06 billion[1] (2020)
$456 million[1] (2020)
Total assets$13.1 billion[1] (2020)
Total equity$2.53 billion[1] (2020)
Number of employees
300,000
Websitewww.magnit-info.ru
Magnit shop in Glazov

Since 2006, the company has developed a chain of "Magnit" hypermarkets in many Russian cities and towns. It overtook its rival X5 Retail as Russia's largest retailer in terms of sales in April 2013, although it is still under-represented in Moscow.[4] As of July 2014, it is the world's fourth largest retailer by market capitalization.[5] However, the largest retailer in Russia in 2017 is the X5 Retail Group.[6]

In early 2018 major changes in ownership and leadership occurred in Magnit. In February the founder sold the vast majority of his stake in the company to a leading Russian state-owned bank called VTB Bank.[7]

HistoryEdit

The founder of Magnit retail chain, Sergey Galitsky, established JSC Tander in 1995.[8]

In 2004, the retail chain was "rebooted", adopting the convenience store format. At the same time, the company was wrapping up its wholesale operations that distributed household chemicals and perfumes, and switched capacity from its Krasnodar-based trade centre to the distribution complex in Kropotkin. Six years after its establishment, Magnit retail chain grew to 1000 stores all over the country. In 2005, the number of stores was already 1500; the company overtook Pyaterochka in total revenue.[9]

In 2010, Deloitte – a multinational consulting services provider – included Magnit in its list of the world’s top 250 retailers. The same year, the company opened its first store under the drogerie format – Magnit Cosmetic.[10]

In 2014, Magnit became the largest Russian importer. During the same year, its stores were equipped with cashless payment terminals and started introducing self-service checkouts. The company began construction of its own greenhouse complex in Krasnodar Krai. In 2015, Magnit became the first Russian chain to reach the 10,000-store milestone and demonstrated record growth rates. Analytical data showed that every 10th ruble spent by Russian households went to Magnit.[11]

In 2017, Magnit increased the number of its distribution centres to 36. The company also launched the first Magnit Pharmacy and Magnit Cash&Carry stores. The same year, operations started at its button mushroom production facility, the largest of its kind in Russia. In 2017, Magnit was placed 3rd in Baker Tilly’s list of Russian businesses with the highest intellectual capital. In 2018, the company opened outlets in offices of Russian Post. The same year, Magnit joined the ranks of the world’s largest public companies in Forbes’ Global 2000, becoming the only Russian retailer on the list.[12]

In early June 2018, Magnit announced that it began negotiations with Marathon Group to acquire JSC SIA International Ltd – SIA Group’s pharmaceutical distributor.[13] Later, in October that year, the acquisition was approved by Magnit’s Board of Directors. It was noted that the transaction amount – which was stated at 5.7 billion rubles or less – would be paid in Magnit’s securities. Also, under the agreement, Marathon Group undertook to not sell Magnit’s shares for at least 3 years after the deal was closed.[14] The acquisition was a part of development strategy for Magnit Cosmetic and Pharmacy businesses.[15][16][17]

In June 2018, Magnit and Russian Post started piloting post office-based outlets in Moscow, Krasnodar Krai, and Ryazan Oblast.[18]

On 29 February 2019, Magnit retail chain announced that it would update its brand identity in accordance with the new cross-format concept. After the update, all stores would have the same visual style and share the same slogan: "Let’s bring families together!”.[19]

Magnit announced its 2023 Development Strategy in September 2018. The company plans to increase its share on the Russian market from 6 to 15%.[20]

FinanceEdit

According to the quarterly statements for the second quarter of 2019 dated 25 July 2019, Magnit reported a total revenue of 342.9 billion rubles, with an IFRS 16 adjusted net income of 2.5 billion rubles.[21]

ManagementEdit

Sergey Galitsky served as the CEO of Magnit Group since its establishment and until February 2018. In February 2018, Galitsky made the decision to sell the majority of his stake in the company to VTB Bank.[22][23] After the deal, a new Board of Directors was elected, and a new management team was formed.[24]

In May 2018 Magnit hired Olga Naumova as CEO.[25] As from 26 June 2019, Jan Dunning serves as Magnit’s CEO (succeeding Olga Naumova,[26] who left the company in the second quarter of 2019). Dunning also holds the office of the chain’s President, having been appointed on 17 January 2019.[27][28][29]

In-house production facilitiesEdit

During the 2015 International Investment Forum in Sochi, Magnit signed an investment agreement for development of an industrial park in Dorozhny village in Krasnodar Krai.[30] The park would cover over 236 hectares and have more than 20 tenants, with the amount of investment planned until the end of 2020 totaling at over 40 billion rubles.[31] In 2018, operations started at the first production facility – Kubanskiy Kombinat Khleboproduktov (Russian: "Кубанский комбинат хлебопродуктов" – Kuban Cereal Products Factory), one of the largest of its kind in Russia. Its output would cover up to 60% of the chain’s demand for pasta, bread, and bakery products.[32]

StaffEdit

As reported by Forbes, Magnit is one of the largest Russian employers, with over 280 thousand employees as of 2017.[33]

ReferencesEdit

  1. ^ a b c d e "FY 2020 Audited Financial Results" (PDF). Magnit. 15 March 2021. p. 73. Retrieved 15 March 2021.
  2. ^ "A Magnit for investors". 8 June 2013. Retrieved 26 January 2017 – via The Economist.
  3. ^ "Magnit today - Magnit retail chain". magnit-info.ru. Archived from the original on 28 April 2017. Retrieved 26 January 2017.
  4. ^ "X5 сдалась "Магниту"". Gazeta.Ru. Retrieved 26 January 2017.
  5. ^ Ведомости (14 July 2014). ""Лента" указала X5 на место в рознице". Vedomosti. Retrieved 26 January 2017.
  6. ^ Rennack, Sebastian (24 April 2017). "X5 Widens the Gap with Magnit". Lebensmittel Zeitung. Retrieved 30 June 2018.
  7. ^ "One of Russia's most successful private entrepreneurs sells–to the state". The Economist. 24 February 2018. Retrieved 30 June 2018.
  8. ^ "АО "Тандер": история компании "Магнит"". moneymakerfactory.ru. Retrieved 18 July 2019.
  9. ^ Ведомости (13 January 2006). "Новый лидер". Vedomosti. Retrieved 18 July 2019.
  10. ^ Ведомости (22 December 2010). "Сеть "Магнит" пробует себя в косметике". Vedomosti. Retrieved 18 July 2019.
  11. ^ Ведомости (30 September 2015). "Российские домохозяйства тратят в "Магните" каждый десятый рубль". Vedomosti. Retrieved 18 July 2019.
  12. ^ "Forbes включил "Магнит" в рейтинг лидирующих фирм мира Forbes Global 2000". RBC. Retrieved 18 July 2019.
  13. ^ ""Магнит" ведет переговоры с Marathon Group о покупке фармдистрибутора "СИА Групп"" (in Russian). ПРАЙМ. 6 June 2018. Retrieved 4 June 2019.
  14. ^ ""Магнит" стал владельцем фармдистрибьютора "СИА Групп"" (in Russian). Interfax. Retrieved 4 June 2019.
  15. ^ "Совет директоров "Магнита" одобрил покупку "СИА групп"". Rambler News Service (RNS). 5 October 2018.
  16. ^ ""Магнит": приобретение СИА Групп состоится на относительно приемлемых условиях". Рамблер. 8 October 2018.
  17. ^ ""Магнит" подал ходатайство в ФАС о покупке фармдистрибьютора "СИА Групп"". Interfax. 2 November 2018. Retrieved 1 December 2018.
  18. ^ ""Магнит" и "Почта России" запустили розничные продажи в 13 отделениях". TASS. 28 June 2018.
  19. ^ "Сеть "Магнит" провела ребрендинг" (in Russian). Kommersant. 21 February 2019. Retrieved 21 February 2019.
  20. ^ "Курс на 15% рынка: "Магнит" озвучил планы развития компании до 2023 года". RBC. Retrieved 18 July 2019.
  21. ^ "МСФО 16 (IAS 16)". finotchet.ru. Retrieved 6 August 2019.
  22. ^ Ведомости (16 February 2018). "ВТБ станет крупнейшим акционером "Магнита"". Vedomosti. Retrieved 18 July 2019.
  23. ^ Ведомости (16 February 2018). "Prosperity Capital назвал сделку ВТБ и "Магнита" плевком в лицо инвесторам". Vedomosti. Retrieved 18 July 2019.
  24. ^ "Галицкий продал ВТБ 29% акций "Магнита"". RBC. Retrieved 18 July 2019.
  25. ^ "Russia's Magnit names former X5's Naumova as executive director". Reuters. 16 May 2018. Retrieved 30 June 2018.
  26. ^ "Экс-глава "Пятерочки" стала руководителем "Магнита"". TASS. Retrieved 18 July 2019.
  27. ^ "Притягательный "Магнит": зачем сети понадобился топ-менеджер "Ленты"". RBC. Retrieved 18 July 2019.
  28. ^ "Экс-глава "Ленты" Ян Дюннинг станет президентом "Магнита"" (in Russian). ПРАЙМ. 17 January 2019. Retrieved 18 July 2019.
  29. ^ "Президентом "Магнита" назначен бывший глава "Ленты" | Бизнес". Forbes.ru. 17 January 2019. Retrieved 18 July 2019.
  30. ^ "Индустриальный парк "Краснодар" розничной сети "Магнит" готовится к запуску первого производства" (in Russian). Рамблер/новости. Retrieved 18 July 2019.
  31. ^ ""Магнит" начинает индустриализацию в парке". Kommersant.
  32. ^ "Конфетки-бараночки: "Магнит" открыл первое производство в своем промпарке". RBC. Retrieved 18 July 2019.
  33. ^ ""Магнит" возглавил рейтинг самых крупных работодателей России" (in Russian). kubnews.ru. Retrieved 18 July 2019.

External linksEdit