TealTech Capital has become a co-owner of the Russian clothing brand Charmstore
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The TealTech Capital investment fund of Vkusville founder Andrei Krivenko and partners became a co-owner of the Russian clothing brand Charmstore, which now has 22 stores throughout the country. The network itself expects that the new partner will help increase the number of sales points fivefold in five years. Experts believe that after the departure of international brands, there are still premises that can be occupied by small local retailers. But growth will be constrained by declining purchasing power.
TealTech Capital told Kommersant that the fund invested in Charmstore. The founder of the brand, Fiosa Mindibaeva, clarified that raising funds was required to scale the network, which has 22 stores in 14 cities, including Moscow and St. Petersburg, build an IT infrastructure, and update the brand. In 2023, the company’s revenue amounted to 1 billion rubles. It plans to open about 100 more stores in five years.
TealTech Capital is part of TealTech of the founder of the Vkusville chain Andrei Krivenko, co-owner of the Agama Group of Companies Yuri Alasheev and the head of ChemRar Andrei Ivashchenko. Other TealTech Capital projects include the Noun brand, Dr. Fomin Clinics, Blue Sleep mattress manufacturer, manufacturer and seller of furniture and household goods Divan.ru, etc.
As follows from the Unified State Register of Legal Entities, TealTech Capital received 5% in Charmstore LLC, the company that manages Charmstore stores. General Director of Infoline-Analytics Mikhail Burmistrov estimates the entire business of the network at 600 million rubles, and a 5% share at 25–30 million rubles. Senior Director of CORE.XP Marina Malakhatko believes that attracting an external partner, especially one who has already invested in retail, is logical for Charmstore. In her opinion, the network “has opportunities for development, especially in the regions.”
If Charmstore can ensure “sufficient turnover and revenue of at least 400 thousand rubles. per square meter per month,” the network will be of interest to the owners of shopping centers, Ms. Malakhatko believes. After their departure, large-format stores of international brands were occupied by Russian and Turkish companies, but the offer to rent space remains, notes Polina Zhilkina, managing partner of Retex. In her opinion, “local networks have room to grow.” The market has not yet fully recovered, agrees Stockmann CEO Gennady Levkin.
At the same time, Polina Zhilkina notes, “the purchasing power of citizens has been declining for several years now,” which directly affects retail. For example, in 2022, the total turnover of the Russian fashion market decreased by 8.1%, to 2 trillion rubles, according to Yakov and Partners. Data for 2023 is not yet available.
TealTech Capital calls fashion retail one of the priority areas for investment. Charmstore “has developed all sales channels,” the network “shows good growth” and has distinctive features, notes the investment director of the fund, Kirill Dudnikov.
To other investment funds, clothing retail may seem “insufficiently innovative” or be deterred by “risky business and too much competition,” notes Gennady Levkin. But managing director of Peregrine Capital Dmitry Gabyshev believes that financial investors “see prospects for the development of Russian fashion brands after the departure of some global brands.”
“TilTech Capital,” notes Mr. Gabyshev, as a rule, acts as a seed investor, but if the asset is successfully developed, it can invest in the company again. The final stage, Mr. Gabyshev adds, could be the sale of the expanded business to a strategic investor or an IPO, which, “as Henderson’s experience has shown, can be a relatively successful scenario.”
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