Just a few years ago, businessman Dmitry Kostygin was not known to the general public. Now he controls large networks from which he builds “Moscow City” in Internet commerce.

Broke the bankCorporate wars specialist Dmitry Kostygin plans to become a collector of retail chains
Photo: Evgeny Dudin, Kommersant

Text: Ksenia Shamakina

“You’re out of the woods for me, Lesha,” says Dmitry Kostygin to his business partner Alexey Ostroukhov in an audio recording of the conversation published on Youtube.com. This entry appeared on the Internet in December 2012, when a conflict broke out between the owners of Dream Industries (DI, “Theory and Practice”, Zvooq.ru, Bookmate.com). Then Kostygin, who owns 21.7% of the company, together with other shareholders removed the CEO and founder of DI Alexey Ostroukhov from management. He stated that this was a raider takeover. A little earlier, Ostroukhov agreed on “cooperation in the field of high technology and the Internet” with the investment division of Alfa Group A1. Throughout 2013, with the support of A1, he has been suing his partners, but there has been no progress yet.

Kostygin made his fortune in corporate wars, where he proved himself to be a master of intrigue and multi-move combinations.

Cut "Ribbon"

Several people are trying to break into the office of the Lenta hypermarket chain; they are stopped by company managers. The attackers are smashing the glass doors with hammers, everyone is in smoke - someone threw a smoke bomb. Among Lenta's defenders is a young man in a suit, Dmitry Kostygin, a minority shareholder of the company. Kostygin and his comrades then failed to protect the office: their opponents in the corporate conflict put their own man in the CEO’s chair. However, having lost the battle, Dmitry did not lose the war.

Before the autumn events of 2010, Kostygin was little known to the general public. He started in the 1990s with translations of books by the American writer Ayn Rand. In the late 1990s, together with Vadim Gurinov, he created the company producing ketchups Petrosoyuz (sold to Heinz in 2005) and the confectionery company Lyubimy Krai (producing oatmeal cookies and gingerbread). But all these business projects did not give him the opportunity to become famous.

The conflict at Lenta became Kostygin’s ticket to the major league of Russian business. Although according to the documents his share in the network was only 1%, senior partner August Meyer (he had 40.6%) trusted him completely. In the summer of 2011, Meyer and Kostygin sold their shares in Lenta for $1.1 billion to opponents in the corporate war - TPG Capital, VTB Capital and the European Bank for Reconstruction and Development. In addition to the income from the sale of his stake (about $25 million), Kostygin also received a bonus from the senior partner for organizing a successful transaction.

“I then turned out to have more money than I ever dreamed of earning, but less than I hope to receive in the future,” Kostygin laughs now.

Retail Empire

After the deal with Lenta, of which Meyer and Kostygin were shareholders for ten years, the partners began to actively invest in other networks. Back in early 2010, they became co-owners of Yulmart, an online store with a network of offline “cybermarkets”. Kostygin’s acquaintance Mikhail Vasinkevich then proposed jointly developing Yulmart. After the sale of Lenta, Kostygin and Meyer began to actively invest in the company: in just a few years they invested $150-170 million, and now they own 60% of Yulmart.

In the spring of 2012, businessmen bought 40% of the Obuv.com shoe chain (see “The Return of Electronics” in the Federation Council No. 9/2013) - several dozen stores throughout Russia. And last summer they closed their biggest deal: they bought a controlling stake in Rive Gauche, the second largest perfume and cosmetics chain in the country, from Oleg Boyko’s Finstar group. In the fall of the same year, Kostygin and Meyer acquired control of the St. Petersburg chain of cosmetics and household chemicals "Rainbow Smile". The total investment of the partners in these assets amounted to more than $500 million. Kostygin and Meyer usually invest on a parity basis. “August says, ‘Take a larger share,’ but I refuse,” Kostygin says modestly.

He also shops alone. At the end of last year, a businessman paid 400 million rubles. acquired the assets of the bankrupt Wild Orchid at an auction: lingerie brands, real estate, rental rights. “I don’t want to involve Augustus yet, this is a complicated matter,” Kostygin says about “Wild Orchid”. First of all, its managers established contracts with suppliers, and now they plan to open new stores. An advertising campaign for “Wild Orchid” was launched in the fall. “I am very grateful to Dmitry for the fact that Wild Orchid continues to live,” says the founder of the network and its ex-owner Alexander Fedorov.

Skyscraper builder

“Cunning and crafty, at the same time far-sighted and courageous,” is how one of Kostygin’s former partners characterizes. For example, Kostygin acquired a stake in Dream Industries in order to create an online hypermarket like Ozon.ru on the basis of Yulmart in the future. It will sell not only equipment, but also e-books and music. These areas are being developed by DI.

“Yulmart now is Moscow City at the beginning of construction: an outside observer does not yet understand what is being planned there. Then skyscrapers will rise,” the businessman said about the company in May of this year (see “Sales at Heights” in SF No. 5/2013). But even the “unfinished” Yulmart ranks third in the Federation Council’s rating of “Largest Russian Internet Retailers” after Russian Railways and Aeroflot.

At the same time, Kostygin and Meyer are building the New Lenta. "Enel" (NL - New Lenta) is the working name of the network of "hard" discounters (a total of 3.5 thousand items of goods per 12-14 thousand sq. m, designed including for small wholesale), which partners began to create in 2012.

Enel will be closest to the American Costco and Sam's Club. At the first stage, businessmen plan to invest $250 million in the project and launch 30 small wholesale complexes by 2016. Several sites for hypermarkets have already been purchased in St. Petersburg and in the Moscow region, the first stores should open next year. Enel has no outside investors, so the company is unlikely to become a bone of contention in the hands of shareholders. Dmitry Kostygin has already demonstrated his fighting qualities, now it’s time to demonstrate his entrepreneurial talents.

Kostygin straightened his shoulders

Dmitry Kostygin’s first major project is the translation of books by the writer and creator of the philosophical movement of Objectivism Ayn Rand. In the early 1990s, Kostygin was the first to translate her novels “We are the Living”, “The Source” and the “Atlas Shrugged” trilogy into Russian. This took Kostygin five years: he translated each Atlas book for a year. In 1999, the American August Meyer, also a big fan of Rand, came to the writer’s homeland in St. Petersburg, where he met Kostygin.

Conflict manager

Conflict manager