The French Auchan bought fourteen hypermarkets of its Ramstore chain for 182 million euros in December. Enka is busy looking for other customers among the largest commercial networks, and experts think the other Ramstore outlets will be sold soon. But Enka is unlikely to have to fight off potential buyers -Ramstore supermarkets are working at a loss, so only their premises are sure to find bidders.
The sale started on December 19, when the French operator of the Auchan group offered 182 million euros for the 14 supermarkets, each with 6-7 thousand square meters of floor space, and their leasehold. All Ramstores will change their signs to Auchan by the middle of next year. Enka will preserve 30 to 40 other outlets, according to different estimates, and is anxious to get rid of them too.
Ramenka Co., Ramstore chain manager, was established in 1997 by Enka and the KOC Holding, Turkey's top industrial conglomerate with interests in trade and finance. They modeled their trade on the Migros chain, which has more than 700 super- and hypermarkets in Turkey. Ramenka is not so ambitious. Prior to the sale, it had 55 outlets in Russia, mostly in Moscow-11 shopping centers and 44 super- and hypermarkets. Only 30 of them are still working in rented premises.
Ramenka did well at the start, with no competition to speak of. Foreign big business shunned Russia after the 1998 crisis, while Russian retail chains, Sedmoi Kontinent and Perekrestok, were only starting out. Besides, their high prices made them no rival to the Turkish chain.
A retail boom came to Russia with the start of the 21st century. Chains appeared one after another, so the world giants Metro and Auchan took interest in the young market. The smaller traders had to choose their social niches quickly. Kopeika and Pyaterochka catered for the low-income customers, and Sedmoi Kontinent and Perekrestok to the middle class. Auchan and Mosmart offered goods for the whole family at reasonable prices. Commodities, prices and market strategies were determined accordingly. The Ramstore chain did not position itself in time, and so could no longer compete. It had sunk to the bottom of the top ten retail list by 2006, with most of its stores working at a loss.
Now, Ramenka is getting rid of its white elephant. KOC Holding banged the door just in time, while Enka, now the only proprietor, is looking for bidders. Auchan was the first. The new acquisition has doubled its Russian chain from 15 outlets to 29. It will be harder to palm off the rest of the declining business. Nothing but the premises have any value. But then, the bidder would be wiser doing business with their proprietors when the contract with the Turkish company expires or is severed.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
