Decathlon will pay more than 140 million rubles to the owner of the Leto shopping center in St. Petersburg

The Moscow Arbitration Court ruled to recover a total of more than 140 million rubles from the managing structure of the Decathlon retailer Oktoblu LLC. in favor of the owners of the Leto shopping center in St. Petersburg – LLC SPb-Leto (it is owned by a consortium of investors with the participation of Malltech), where the chain had a store with an area of ​​5529 sq. m. Most of the amount is a fine of 1,000 euros for each hour of closed shop downtime, follows from the filing cabinet of arbitration cases. The decision of the Moscow arbitration has not yet entered into force and can be appealed. Decathlon and Malltech did not provide a prompt response to Vedomosti’s request.

Decathlon is the world’s largest manufacturer and retailer of sporting goods. In Russia, the company suspended the work of 57 stores in March last year due to “the impossibility of continuing deliveries to the country due to sanctions.” In 2022, the revenue of the main legal entity of the retailer, Oktoblu LLC, amounted to 15.3 billion rubles. (against RUB 28.5 billion in 2021), and a net loss of RUB 7.6 billion. (against net profit of 1.4 billion rubles a year earlier).

The Turkish company FLO Retailing and the Lebanese Azadea Group are negotiating the acquisition of the business of the French chain Decathlon in Russia, Vedomosti wrote. Two options are currently being considered. The first is the buyout of the entire Russian network by the investor and the relaunch of Decathlon stores according to the franchising model, the second is the same, but with the closure of some outlets. Earlier, the French retailer had already sold part of the outlets, but then the Ministry of Industry and Trade said that the sale of the network in parts violates the conditions established for leaving foreign companies, which must halve the price of an asset and deduct 10% of the transaction to the budget.

The French retailer in court with the Leto shopping center insisted that there were no grounds for collecting a fine for suspending commercial activities, since the defendant had good reasons for closing the store, namely, EU restrictions on the import of goods into Russia, which formed 10% of the total defendant’s annual turnover, the suspension of freight carriers Maersk and MSC in March 2022, as well as global changes in the economic environment that made it impossible for the business to conduct normal business activities with the same level of turnover and revenue. At the time of filing the lawsuit, the fine for closing the store not agreed with the owner of the shopping center amounted to 121 million rubles, and at the moment it is already about 300 million rubles, says Yevgeny Letunovsky, a senior lawyer in the dispute resolution practice at Orion Partners law firm, who represented the interests of the owner of the shopping center. He points out that in some cases the courts reduce penalties by 10-100 times, for example, the Arbitration Court of the Moscow Region in another case reduced the contractual penalty in a lawsuit against Bershka by more than 7 times. Decathlon, on the other hand, tried to reduce the penalty for its breach of contract by 240 times. However, the representatives of the landlord managed to convince the court that for a deliberate continued violation of the contract, entailing serious material losses for the landlord, the amount of the fine should not be reduced, the lawyer says.