Russia put to dry – Newspaper Kommersant No. 162 (7363) of 09/03/2022
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Following Electrolux Professional, which produces equipment for public catering, the “main” Electrolux group also leaves Russia. The embedded equipment of the company occupied up to 15% of the Russian market. The Russian legal entity Electrolux has already received a domain without an explicit mention of the Swedish trademark. The company will continue to provide after-sales service for equipment already sold in Russia, but only if it was not imported through parallel imports, market participants explain.
Swedish home appliance maker Electrolux said it would sell its Russian division to local managers for an undisclosed sum. Company explained that the hostilities in Ukraine and the sanctions that followed “made it impossible for Electrolux to continue working in the country.”
The Russian division of Electrolux, after separation from the main group, will continue the warranty service for already sold goods, but the company will stop supplying it with equipment.
Electrolux estimates one-time losses from leaving Russia at 350 million Swedish kronor (€32.6 million).
Electrolux Rus LLC has been headed by Pavel Potapov since 2016. By the time Electrolux left Russia, the Russian legal entity was wholly owned by the Swedish AB Electrolux. However, back in July, according to SPARK data, the company acquired a domain without mentioning the Electrolux brand – ecompany.ru. The domain, registered in 2000, was put up for sale at a price of about 70-120 thousand rubles, said domain investor Pavel Gross-Dneprov to Kommersant.
The Electrolux group, in addition to the main brand, is represented in Russia by the brands AEG and Zanussi, it does not have production facilities in the country. The company reported that sales of its equipment in Russia in 2021 amounted to 4% of European and 1.6% of global ones. Alexey Pogudalov, commercial director of Holodilnik.ru, clarified to Kommersant that back in the spring, the Russian division of Electrolux decided to sell the rest of the products imported before February 2022.
Embedded appliances of the Electrolux group in the Russian market “occupied a confident second place after Bosch,” says Stanislav Soltitsky, Deputy Director for Strategic Development at Marvel Distribution. This data is also confirmed by the Kommersant source, referring to GfK data. According to him, Electrolux built-in appliances accounted for 10.1% of the Russian market in the first half of 2022. In February, it accounted for 14.7% of the market, by July the share had dropped to 6%.
In July, the company announced the sale of its business in Russia to local management Electrolux Professional is a company that produces professional equipment for cafes, restaurants and laundries. Electrolux Professional is not part of the Electrolux Group as of March 2020.
In July 2022, its CEO Irina Terenina became the new owner of Electrolux Professional Rus LLC, and the name of the legal entity was changed to Solutions for Kitchens and Laundries LLC.
At the same time, the share of Mrs. Terenina, according to SPARK-Interfax, is encumbered by the Swedish legal entities Electrolux Professional AB and Electrolux Professional Sweden AB. These companies previously owned, respectively, 90% and 10% of the charter capital of Electrolux Professional Rus.
Electrolux brand back in April was added in the list of products compiled by the Ministry of Industry and Trade that can be imported without the permission of the copyright holder. By the third, current version of the document (dated July 21), AEG and Zanussi appeared on the list. “Even at the end of March, sellers began to explore the possibility of importing products through alternative channels, and today part of the assortment has already been replaced,” Mr. Pogudalov said. The issue of service support for equipment imported by the representative office is “not worth it”, he noted: “But goods from parallel imports, apparently, will have to be serviced at the expense of sellers, and this will be reflected in the retail price.”
Electrolux played a significant role in the Russian home appliance market, but its departure cannot be called a catastrophic loss, Mr. Soltitsky believes: “Sooner or later, it will be painlessly replaced by more innovative and dynamic Chinese brands such as Haier or Midea, which have already firmly established themselves in the domestic market. “.
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