Rostov perfume chain plans triple growth

As Kommersant has learned, the Rostov-based AAA group of companies intends to rebrand and expand the Kosmetichka perfumery and cosmetics chain it owns. This year the group plans to increase the number of chain stores in the Rostov region and Krasnodar region from the current 14 to 20. In 2008, the owners expect to open another 7-8 stores, including in Samara and Astrakhan. Subject matter experts do not rule out that in this way the owners of Kosmetichka may be preparing the regional chain for sale to one of the federal companies. The Kosmetichka chain of stores was founded in 2004 on the basis of the wholesale company AAA Cosmetics. Today the chain includes 14 stores in Rostov, Taganrog, Novocherkassk, Krasnodar and on the Black Sea coast. The transition to the new format is planned to be carried out gradually. The new concept already operates two stores in Krasnodar. In July, another store was opened in Novorossiysk. At the same time, work is underway to change the stores that were open before the rebranding.

The general director of Kosmetichka, Alexey Poluboyarov, told Kommersant yesterday that this year the chain plans to open 6 more stores in the region in a new format. The chain's rebranding was carried out by the British consulting agency Wolff Olins. The amount of the contract with the agency is not disclosed. The new format, according to Mr. Poluboyarov, involves, in particular, increasing the share of premium cosmetics in the chain’s assortment to 30%. In addition, a decision was made to change the way the goods are presented. “So-called “places to play” will be created in the retail space - special zones where customers will be able to get acquainted with cosmetic products in a playful way - for example, try to create a new image on the spot,” explained Kosmetichka. The transition to a new format of the Rostov chain stores is planned for October this year.

Kosmetichka does not specify the volume of investments in the development of the chain. According to Alexey Poluboyarov, the chain plans to develop stores with an area of 150–200 sq. m. on lease terms. m. According to market participants, in the south of Russia the opening of one perfume and cosmetics store with an area of 150 sq. m. m, taking into account the cost of the first batch of goods is about $350 thousand. In 2008, as Mr. Poluboyarov said, it is planned to open another 7-8 Kosmetichka stores, including in regions new to the chain - in Samara and Astrakhan. In 2009, the total number of stores in the chain is planned to be increased to 45. “Today, the clientele of perfumery and cosmetics chains is growing, including due to the reduction of informal trade - for example, in underground passages. This allows us to hope for successful expansion of the network,” the company emphasized.

Other market participants also agree with this assessment. In particular, a source in the management of the Ile de Beaute company noted in an interview with Kommersant that today the business of the chains is growing due to the arrival of new customers who previously preferred to purchase cosmetics and perfumes at street kiosks. At the same time, subject matter experts do not rule out that the expansion of the regional network may indicate possible preparations for its subsequent sale to federal companies. “Expanding the local network looks justified. If the owners have enough financial resources, they will be able to gain their market share and increase the capitalization of the network. The regional market, despite the expansion of federal companies, is not yet saturated, and transactions for the acquisition of local networks should not be expected in the near future. However, in the future such transactions are very likely,” Andrei Verkholantsev, an analyst at Antanta-Capital Investment Group, is convinced.

Sergey Surzhenko

Kommersant (Rostov) No. 141 dated 08/09/2007, p. 12

“AAA” will open “Kosmetichka” in a new way