Mothercare will be taken care of in Russia – Newspaper Kommersant No. 199 (7400) of 10/26/2022

A partner of the British children’s goods chain Mothercare, which announced its withdrawal from the Russian market, is looking for a company to which it will transfer its business in the Russian Federation. According to Kommersant’s information, negotiations are underway with the distributor of the Jamilko fashion market: the rights to lease stores and unsold goods can be transferred to him. Experts suggest that Jamilko will equip the redeemed sites for multi-brand stores with children’s goods, but warn of fierce competition in this segment.

Jamilko plans to buy out the Russian business of the British chain of children’s clothing and goods stores Mothercare, three sources told Kommersant in the retail market. Negotiations are underway with the Kuwaiti Alshaya Group, which owns the master franchise of the Mothercare brand in Russia. Jamilko, Alshaya Group and Moneks Trading (the Russian subsidiary of the Kuwaiti group) did not respond to Kommersant’s request.

The head of the CORE.XP retail department, Marina Malakhatko, estimates the Russian business of Mothercare at 2.4-3 billion rubles. According to one of Kommersant’s interlocutors, as part of the Jamilco deal, the rights to lease stores operating under the Mothercare banner, as well as commodity stock, will be transferred. At the same time, he adds, stores will operate under a different brand. According to a similar scenario, Alshaya Group ceded the Russian business of Starbucks, for which it also had a master franchise in the Russian Federation, to restaurateur Anton Pinsky, singer Timur Yunusov (Timati) and Sindika Group of Companies of Senator Arsen Kanokov.

Mothercare announced in March this year that it would not work in Russia due to the military operation in Ukraine. At the same time, the work of 120 brand stores and online sales was suspended. Russia accounted for about 20-25% of the retailer’s global retail sales, the company noted.

In July, Vedomosti reported that Alshaya Group plans to sell the Russian business to Mothercare. It was also reported that Krokid, a manufacturer and seller of children’s and women’s clothing, plans to open its outlets at ten sites of the British brand in the Russian Federation (see Kommersant on August 11).

Marina Malakhatko notes that Jamilko may continue to develop a network of children’s goods, but under a new brand. Mothercare stores, as a rule, are located in the “children’s” areas of shopping centers, so it is not advisable to equip them with fashion brands for adults, the expert explains.

Jamilko can equip multi-brand department stores with children’s goods on the purchased premises, part of the assortment of which will be Mothercare’s unsold stock, suggests Alexei Vanchugov, managing partner of Vanchugov & Partners. According to him, fashion retailers traditionally buy for the season ahead, so the warehouses and stores of Mothercare may now have goods from the winter and spring-summer collections.

If Mothercare succeeds in negotiating with Jamilco, then this is a chance for the British manufacturer not to completely lose the Russian market, and for Jamilco it is an opportunity to replace the business of brands that do not plan to return to Russia, Ilya Yaroshenko, president of the Baon clothing chain, believes. At the same time, according to him, there is quite tough competition in the market for children’s goods.

In turn, Alexey Vanchugov notes that the markets for children’s and pet products are the most stable in non-food retail. According to him, consumer spending on such goods remains stable in any crisis.

Alina Savitskaya