Naumova came to X5 in 2013. It was under her that Pyaterochka updated its positioning, appearance and assortment / Evgeny Razumny / Vedomosti

X5 Retail Group, without giving a reason, announced that Olga Naumova was leaving her post as CEO of the Pyaterochka chain of convenience stores, the main division of Russia's largest retail company in terms of revenue. A representative of X5 declined to comment. It was not possible to contact Naumova.

The acting CEO will be X5 executive director Igor Shekhterman, and the new CEO of Pyaterochka, X5 reported, will be found within the company – after the annual strategy update.

Naumova joined X5 in 2013. Before that, she headed the Rimera company, the oilfield services division of the Chelyabinsk Pipe Rolling Plant. It was under her that Pyaterochka updated its positioning, appearance and assortment; before that, stores were losing customers. X5 accelerated revenue growth and regained its leadership in retail turnover, overtaking Magnit.

The position of CEO of Pyaterochka has been an island of managerial stability in X5 for the past five years, analysts at Renaissance Capital write: Naumova has become a key figure in restoring X5's business, and her departure is bad news for the group. Of course, a company of X5's size does not depend on just one person, analysts continue, but it is difficult to interpret Naumova's departure in a positive light.

Naumova has completed the task of restoring the growth of Pyaterochka, and the company probably did not have the opportunity for her further development as a manager, suggests Mikhail Burmistrov, CEO of Infoline Analytics. In addition, he continues, the bar of expectations for Pyaterochka was raised very high and it will be very difficult to meet them in the conditions of tougher competition and the probable return of Magnit to growth. Plus, further rapid growth risks running into antitrust restrictions, warns Burmistrov: in the Moscow Region and St. Petersburg, X5's market share is already quite high.

Last week, X5 released its Q1 2018 results: revenue increased by 20.2% compared to Q1 2018 to RUB 350.3 billion. X5's turnover began to grow more slowly: in Q4 2017, it increased by 23.4% compared to Q4 2016. The reason is precisely Pyaterochka. Since the beginning of the year, sales growth in this chain has slowed: in January, revenue grew by 24.2%, in February - by 20%, in March - by 20.7%. Revenue in comparable convenience stores even fell - by 0.8% due to a 2.2% decrease in the number of purchases. According to VTB Capital, this was the first reduction in Pyaterochka traffic since 2014. One of the main tasks of Naumova’s successor is to reduce promotional activity without sacrificing revenue, VTB Capital analysts believe.

After VTB bought the largest block of shares in Magnit from the founder of the chain Sergey Galitsky, the market expects changes in the management team of Magnit, Burmistrov reminds. Naumova, in his opinion, could be one of the main candidates for the post of CEO of the company: "After all, its most powerful competence is precisely anti-crisis management and development of a positioning strategy."

The market discussed that Magnit, whose key format is also convenience stores and a discounter, needs, first of all, a strong top manager for radical changes, agrees senior analyst at Raiffeisenbank Natalia Kolupaeva. "Olga Naumova's name was certainly mentioned among the candidates discussed, so further announcements will be a great intrigue for the market," the analyst is sure.

There will be inevitable speculation on the market that Naumova will join Magnit as soon as her non-compete agreement expires, according to analysts at Renaissance Capital, who recall that Elena Milinova, the former financial director of X5, recently took over the position of Magnit’s CFO.

The contracts of X5 top managers state that for six months after leaving the group, the manager cannot work for its competitors without X5's consent, an X5 representative said. Also, during this period, a top manager who left X5 cannot hire former colleagues or encourage them to leave X5. All managers, including Naumova, have similar clauses in their contracts, says Vedomosti's source, but he did not disclose details of the termination of her contract.

Magnit's press service did not respond to Vedomosti's questions.

Pyaterochka CEO is being courted by Magnit