LG, Bosch and Sony stores are selling off remaining goods before closing in the Russian Federation
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As Kommersant found out, the remaining specialized stores of LG, Bosch and Sony began to close throughout Russia. Technical support clarifies that some stores will remain open until the summer, until the remaining goods are sold out. Until now, retail partners of foreign manufacturers have not closed stores to avoid fines from landlords, market participants say. In place of the stores of the departed companies, sales points for suppliers from Turkey and China are already opening.
Kommersant discovered that at the beginning of February 2024, mono-brand stores of South Korean LG and Japanese Sony closed in the Afimall City shopping center. Instead of the South Korean vendor, the opening of a Grundig store (owned by the Turkish Arcelik) was announced in March. LG technical support told Kommersant that all the brand’s stores were closed “due to a stop in supplies.” According to the LG website, the company had four stores in Moscow. The Sony support operator reported that the store in the Afimall City shopping center is also closed “due to lack of supplies.” Three more Sony retail outlets in Moscow will remain open until the summer to sell off leftovers: “Previously, there was a Sony Center in every million-plus city in the Russian Federation, but due to sanctions they are all closing.”
In addition to Asian companies, the German Bosch began to close mono-brand stores, the vendor’s service support told Kommersant. According to the operator, all stores are already closed, except for one, where they are also selling off their leftovers. The support service did not specify how many points there were.
After the outbreak of hostilities in Ukraine, many foreign electronics brands began to freeze supplies to the Russian Federation, including LG, Sony, Bosch and Samsung. Kommersant’s interlocutor among large retailers explains that stores began to close only now, since many had long-term lease agreements, upon termination of which they would have to immediately transfer all payments: “Also, companies in such cases are often fined. The tenant must give six months’ notice about the termination of the lease, so it was easier for the retail partners of the departing vendors to “see out” until the end of the contract, although official deliveries stopped.”
The source adds that household appliance stores are mostly closing because they are more unprofitable, and manufacturers in the Russian Federation no longer need promotion: “For example, it is still beneficial for Samsung partners to have a network of mono-brand stores, since they mainly sell smartphones and tablets.” Samsung clarified to Kommersant that the company does not have its own retail stores in the Russian Federation, supplies are still stopped.
LG in Russia has never been widely represented in the form of mono-brand stores; the company primarily focused on corporate customers, notes Evgenia Prilutskaya, director of the infrastructure retail department at CORE.XP. In her opinion, mono-brand stores of LG and Sony were used primarily for promotion: “In this regard, shopping centers did not feel the closure of stores of these brands. In the Metropolis shopping center, for example, a Redecoro home goods store has already opened in place of the LG store.”
Regional Director of the Retail Real Estate Department of NF Group Evgenia Khakberdieva adds that the active interest and entry of new brands from China and other countries into the market can not only compensate for the departure of Western brands, but also “stimulate the further development of retail by offering consumers new products and technologies.”
Ms. Khakberdieva’s arguments are confirmed by Focus Technologies data. Judging by them, in Moscow alone in January 2024 there were 2% more buyers in the “electronics and household appliances” category than in the same period in 2023. The average check increased by 9%, and turnover by 12%. As of the end of 2023 (see “Kommersant” dated November 28, 2023), brands such as Haier, Candy, Hisense and Grundig planned to open a total of more than 120 mono-brand stores in Russia in 2024.
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