Structures of Ivan Tavrin may acquire a stake in Melon Fashion Group

Befree, Love Republic, Zarina and Sela Melon Fahion Group, managing clothing chains, may have two new financial investors. In parallel with Vladimir Paliy’s GEM Invest, which agreed to buy a 36% stake in the group from the Swedish Eastnine, the remaining stake can be acquired by Kismet Capital Group structures of the ex-CEO of MegaFon Ivan Tavrin. Analysts call Melon Fahion Group a successful asset to enter the market and one of the main beneficiaries of the withdrawal of some Western clothing brands from Russia.

The Federal Antimonopoly Service (FAS) gave preliminary consent to the structure of Kismet Capital Group (KCG) Ivan Tavrin Radio Reklama NN LLC for the acquisition of up to 75% of MFG Invest JSC and the rights to manage Melon Fashion Group (MFG), which includes clothing chains Befree, Love Republic, Zarina and Sela. About this FAS reported on Thursday.

At the end of 2022, MFG included 867 stores. The group’s revenue over the past year increased by 23%, to 46 billion rubles. EBITDA rose 69% to RUB 14.6 billion, while net income more than doubled to RUB 7.8 billion, the company said. According to its reporting, 36% of MFG at the end of 2022 was owned by the Swedish Eastnine, 34% by IGM Manufatrust Ltd, the head of the board of directors of the group David Kellerman, 11% by MFG Intressenter AB, 7% by CEO Mikhail Urzhumtsev, 12% by unnamed persons. MFG told Kommersant that they do not comment on the actions of shareholders.

eastnine 7 august announced on the conclusion of an agreement on the sale of its 36% MFG with GEM Invest LLC Vladimir Paly for 15.6 billion rubles. KCG and GEM Invest are likely to be partners in the purchase of MFG. According to the Unified State Register of Legal Entities, MFG Invest, created in July, in which the KCG structure can receive a share, is headed by Daria Vavilina. Linkedin has a profile of Daria Vavilina, who worked as an investment manager at GEM Capital in 2018-2023, and in February 2023 became the managing director of GEM Invest.

Marat Ibragimov, a senior analyst at Gazprombank, notes that the two financial investors will have common goals related to obtaining the maximum return on investment. In the future, according to the analyst, current buyers of MFG may take the company to an IPO or sell the business to a strategic investor.

For KCG, the former CEO of MegaFon Ivan Tavrin, the purchase of a stake in MFG may be the first deal in the clothing retail market. Now the KCG portfolio, in particular, includes the Avito online ad service and a share in the HeadHunter recruiting service. Mikhail Burmistrov, CEO of Infoline Analytics, says that MFG looks like an obvious entry point into the fashion market.

According to him, along with Gloria Jeans, the group is one of the main beneficiaries of the changes associated with the withdrawal of some Western fashion brands from Russia, and has good business growth potential. According to Mr. Burmistrov, the preservation of the current experienced management team of MFG will play an important role in the transaction.

Anatoly Kostyrev