V.Baranov

Klondike West LLC

manages a hypermarket. "Klondike" in Rostov Part of the Klondike group of companies, which unites three DIY hypermarkets in Kaliningrad with an area of about 15,000 sq. m each, a construction and transport company. Turnover - $100 million (all companies of the group, 2007, own data). Founder - deputy of the Kaliningrad Regional Duma Sergey Kononov (USRLE).

The DIY hypermarket with a retail area of 14,130 sq. m. will open on October 4 next to Metro Cash & Carry on Dovatora Street, said Maria Dobrinskaya, Advertising and PR Director of the Klondike Group. Investments are about 435 million rubles.

Construction has been underway since February on a 3.3-hectare plot of land, Dobrinskaya says. The company subleased it for 49 years from Rostov's Stroyindustriya, clarified Vladimir Didenko, head of the city's construction coordination department for the Rostov administration. Stroyindustriya confirmed the information.

A staff of over 300 people will serve about 4,000 customers daily, Dobrinskaya shares her plans. According to her, product groups will be presented in all categories from economy to premium class, but prices will not be lower than market prices. Much attention will be paid to new products on the construction market that are not presented in Rostov, and the hypermarket also plans monthly promotions and discounts for regular customers, she adds. The company plans to conquer at least 10% of the Rostov DIY market in 2009.

The chain is planning to cooperate with local manufacturers of tiles, furniture, and lumber – tenders have been held, but the results have not yet been disclosed, Dobrinskaya added.

The Rostov hypermarket is Klondike's first step in the project to create a nationwide chain, adopted in 2007 (see inset). The next stores in the south will open in Pyatigorsk and Stavropol; land plots are currently being selected, Dobrinskaya noted.

In Rostov, the DIY store boom began in late 2007, when MaksiDom (20,000 sq. m), SantaHouse (4,500 sq. m), Leroy Merlin (18,000 sq. m), and Castorama (11,500 sq. m) opened. Even earlier, the local company Mir Remonta (since 1996, about 3,000 sq. m) and the federal chain Starik Khottabych (since 2000, 1,200 sq. m) began operating on the Rostov market. Since 2007, Mir Remonta has been building its second construction center with a total area of 24,500 sq. m along the federal highway M4 Don. Leroy Merlin will also build a second hypermarket on Orbitalnaya Street.

Rostov DIY market is oversaturated, says Alexander Grishchenko, deputy director of Rostov store "Starik Khottabych". According to Maxim Klyagin, analyst of UK "Finam Management", in one or two years, "Klondike" with an adequate price-quality ratio will be able to occupy 10-15% of Rostov DIY market. Despite the unknown brand, "Klondike" can strengthen its position in regional markets due to the assortment and services that are non-standard for such stores (a wide range of textiles, decorative items, furniture, free interior design services), says Galina Maliborskaya, director of agency services at Colliers International .

Large chain projects in Rostov account for more than 60% of the DIY market, 30-40% - unorganized and small trade, calculated Grishchenko. At the beginning of 2007, chains occupied less than half of the market, he adds. In 2008, the Rostov market will grow by 10-15%, predicts Klyagin. He estimates the volume of the Rostov DIY market, taking into account the region, at $600 million, the Russian market - at $10-12 billion.

"Klondike" will make itself