CEO's Message
Ladies and gentlemen!
Obuv Rossii group of companies is a federal footwear chain which ranks among the ten largest retail chains in Russia: more than 120 stores are located in major cities throughout Russia. Stores of Obuv Rossii occupy more than 2% of retail footwear sales in such cities as Irkutsk, Krasnoyarsk, Tomsk, Omsk, Tyumen. In 2010 the revenues of Obuv Rossii exceeded 1.6 billion rubles.
Currently a group of companies consists of such retail chains as Westfalika (middle priced segment) and Peshekhod (economy chain), as well as youth fashion-brand Emilia Estra.
Obuv Rossii has been working on Russian footwear market for over eight years and the history of our core retail brand Westfalika numbers more than 18 years. Westfalika is one of the largest chains of Siberian and Ural regions, according to the magazine Delovoy Kvartal Westfalika ranks among the three most expensive and well-known brands in the region. Peshekhod is a multi-brand economy chain which has begun to evolve since April 2006. Despite youth and newness of this retail format the chain has gained popularity in the cities of Siberia and Ural.
The strategy of Obuv Rossii reflects its mission - to improve and offer people convenient, manufacturable and beautiful footwear. Developing multi-format retail we strive to ensure that our stores offer products for different consumer groups with different income levels, and thus follow the basic principle - excellent quality of footwear and high level of service. Our established relationships with various suppliers can provide a wide selection of footwear for men, women and children and to launch new collections every season.
According to Express Obzor Russian footwear market will increase by 10-12% per year in the next 3-5 years. In 2010 its volume made up about 25 billion dollars. Now consumption of footwear is 2.8 pairs per person per year. This number will grow primarily by increasing the purchasing power of people with average income. The most promising footwear segment is middle priced segment which is 30% and this number will increase. The culture of footwear consumption is changing: footwear in the capacity of essential element has become an element of life style. Nowadays an increasingly important role is played by strong brands and ability to achieve high customer loyalty.
Following the strategy of innovation and using the opportunities of a rapidly growing footwear market Obuv Rossii has become a pioneer of new formats and technology advancement, and is actively expanding its range of financial instruments. In March 2007 the company launched its consumer lending program in Westfalika and Peshekhod. By the end of 2010 the sales of shoes on credit amounted to more than 310 million rubles, plan for 2011 – 600 million rubles. In addition the company was the first among footwear retailers which came to an open capital market, the volume of promissory note program exceeded 650 million rubles in 2007-2009.
The main trend that characterizes development of the footwear market is a consolidation of chains and the gradual consolidation. Dynamics of market growth and its potential attract investors. In 2010 UCP investment fund purchased 36% shares of Monarch group of companies, in spring of 2011 the company TsentrObuv announced the plans for IPO. Obuv Rossii also plans to work actively in the open capital market - the company will post a bond loan in the amount of 700 million rubles. Borrowed funds as well as the own funds of the company will be concentrated on the chain development at a ratio of 50/50.
For 4 years the company plans to increase the number of stores of the chain to 420 and to increase the revenue almost in 5 times – from 1.6 billion rubles in 2010 to 7.5 billion in 2014. The priority areas for development are the Ural, the Central part of Russia and the Far East. Turnover growth is planned not only by increasing the number of stores but also due to the revenue growth with each store - up to 15% annually. It will be possible through the implementation of the following factors:
• qualitative improvement of products (Westfalika: increasing the share of fashionable and stylish classic footwear, and increase the share of footwear for men up to 30%, etc.);
Currently a group of companies consists of such retail chains as Westfalika (middle priced segment) and Peshekhod (economy chain), as well as youth fashion-brand Emilia Estra.
Obuv Rossii has been working on Russian footwear market for over eight years and the history of our core retail brand Westfalika numbers more than 18 years. Westfalika is one of the largest chains of Siberian and Ural regions, according to the magazine Delovoy Kvartal Westfalika ranks among the three most expensive and well-known brands in the region. Peshekhod is a multi-brand economy chain which has begun to evolve since April 2006. Despite youth and newness of this retail format the chain has gained popularity in the cities of Siberia and Ural.
The strategy of Obuv Rossii reflects its mission - to improve and offer people convenient, manufacturable and beautiful footwear. Developing multi-format retail we strive to ensure that our stores offer products for different consumer groups with different income levels, and thus follow the basic principle - excellent quality of footwear and high level of service. Our established relationships with various suppliers can provide a wide selection of footwear for men, women and children and to launch new collections every season.
According to Express Obzor Russian footwear market will increase by 10-12% per year in the next 3-5 years. In 2010 its volume made up about 25 billion dollars. Now consumption of footwear is 2.8 pairs per person per year. This number will grow primarily by increasing the purchasing power of people with average income. The most promising footwear segment is middle priced segment which is 30% and this number will increase. The culture of footwear consumption is changing: footwear in the capacity of essential element has become an element of life style. Nowadays an increasingly important role is played by strong brands and ability to achieve high customer loyalty.
Following the strategy of innovation and using the opportunities of a rapidly growing footwear market Obuv Rossii has become a pioneer of new formats and technology advancement, and is actively expanding its range of financial instruments. In March 2007 the company launched its consumer lending program in Westfalika and Peshekhod. By the end of 2010 the sales of shoes on credit amounted to more than 310 million rubles, plan for 2011 – 600 million rubles. In addition the company was the first among footwear retailers which came to an open capital market, the volume of promissory note program exceeded 650 million rubles in 2007-2009.
The main trend that characterizes development of the footwear market is a consolidation of chains and the gradual consolidation. Dynamics of market growth and its potential attract investors. In 2010 UCP investment fund purchased 36% shares of Monarch group of companies, in spring of 2011 the company TsentrObuv announced the plans for IPO. Obuv Rossii also plans to work actively in the open capital market - the company will post a bond loan in the amount of 700 million rubles. Borrowed funds as well as the own funds of the company will be concentrated on the chain development at a ratio of 50/50.
For 4 years the company plans to increase the number of stores of the chain to 420 and to increase the revenue almost in 5 times – from 1.6 billion rubles in 2010 to 7.5 billion in 2014. The priority areas for development are the Ural, the Central part of Russia and the Far East. Turnover growth is planned not only by increasing the number of stores but also due to the revenue growth with each store - up to 15% annually. It will be possible through the implementation of the following factors:
• qualitative improvement of products (Westfalika: increasing the share of fashionable and stylish classic footwear, and increase the share of footwear for men up to 30%, etc.);
• improvement of the service quality (system of staff training and development of retail staff, training center);
• introduction of new product categories (footwear cosmetics and related products under the brand Westfalika; line hygiene products Westfalika-Medicine, leather goods, etc.);
• large-scale promotion campaign including those with the stars (this year we have an agreement with singer Valeria on the use of her image in advertising of brand Westfalika);
• introduction of new product categories (footwear cosmetics and related products under the brand Westfalika; line hygiene products Westfalika-Medicine, leather goods, etc.);
• large-scale promotion campaign including those with the stars (this year we have an agreement with singer Valeria on the use of her image in advertising of brand Westfalika);
• the development of unique services (selling shoes in installments).
To manage the extensive network we improve the logistics system, build long-term relationships with suppliers and we train staff. We have worked out the technology to enter new regions, for 8 years of work we have created easy-to-copy formats. Wide variety of goods, large-scale marketing campaigns, innovative services – all will help our stores to build an audience of loyal customers and to achieve popularity and reputation of our brands with the shortest possible delay.
Yours Sincerely,
Anton Titov
CEO of Obuv Rossii
Yours Sincerely,
Anton Titov
CEO of Obuv Rossii