“Krokid” will take care of Mothercare – Newspaper Kommersant No. 145 (7346) of 08/11/2022
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Krokid, the owner of children’s and women’s clothing stores Crockid, Cubby and Very Neat, will take over some of the stores of the British chain Mothercare after they close. Given the shortage of a number of positions in the segment of children’s goods, Krokid can become a substitute for consumers. Large foreign chains like H&M and Zara are unlikely to be able to assign leases before the expiration date, experts say.
The Russian manufacturer and retailer of children’s and women’s clothing Krokid will open at least ten stores under the Crockid sign at the premises of the British children’s goods chain Mothercare, which suspended operations in Russia in March. This was told to Kommersant by a representative of Krokid. According to him, agreements have been concluded on two objects, while negotiations are still ongoing on the rest.
Mothercare stores in Russia were franchised by the Kuwaiti Alshaya Group through Monex Trading. At the end of July, the Vedomosti newspaper reported that Alshaya Group put up for sale the Russian business of Mothercare, and is also considering the possibility of selling off inventory and finally closing the entire network. According to 2GIS, the Mothercare network in the Russian Federation includes 57 stores. Alshaya Group and Mothercare headquarters did not respond to Kommersant’s request.
Krokid Group operates stores for children’s brands Crockid and Cubby, as well as the women’s clothing brand Very Neat. In total, the group unites almost 170 outlets in the country. According to the Unified State Register of Legal Entities, Natalya Astashova and Vladislav Muzyka each own 50% of Krokid LLC. In 2021, the company’s revenue was 2.9 billion rubles, net profit – 480 million rubles.
According to Evgenia Khakberdieva, director of the retail real estate department at Knight Frank Russia, given the shortage of a number of positions in the offline segment of children’s goods, Krokid can become an alternative to the departed brand due to the assortment and competitive prices. According to her, Mothercare stores were located in the area of children’s goods, whose customers were tired of the lack of familiar brands. According to Ms. Khakberdiyeva, the creation of leisure centers for children was also considered in their place.
Other Russian trading companies also plan to occupy the area of outgoing brands. Ilya Yaroshenko, president of the Baon clothing chain, notes that the retailer is considering premises that require minimal investment with good location and traffic. Claims for the area where the stores of similar format used to be located, and the Smile of the Rainbow chain. Thus, the company opens its stores on the ground, which has decided to leave the Russian market of the Watsons chain.
Alexey Vanchugov, managing partner of Vanchugov & Partners, doubts that large foreign networks that have suspended their work in the country, including Inditex, Uniqlo, H&M, will be able to assign rights or vacate the sites they occupy before the lease expires. “Sales in stores of these brands per square meter are three or four times higher than other brands. Since shopping centers receive a percentage of the turnover, this means that the replacement of the tenant will reduce the rental flow by at least half,” he says. According to the expert, in the conditions of a high debt load on the owners of shopping centers, it is expected that the stores of these brands will continue to pay rent or fines for demurrage until the leases expire.
Alshaya Group is also selling or closing its other assets in Russia. Victoria’s Secret, a chain of lingerie and perfumery stores, which Alshaya Group also developed in Russia under a franchise, announced its exit from the market in May. In addition, the company has agreed to sell local Starbucks facilities to restaurateur Anton Pinsky, Timur Yunusov and Sindika Group of Companies of Senator Arsen Kanokov. According to a Kommersant source among shopping center operators, many of the managers do not agree with the assignment of lease rights to their premises without their consent and, for example, prohibit the dismantling of Starbucks signs.
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