When was the magnet company founded? Retail chain "Magnit"
Section 1. Russian retail company "Magnit".
« Magnet» is a Russian retail company and a chain of food stores of the same name (most of them have a “convenience store” format). As of mid-2012, it is the largest retail chain in the country in terms of the number of food stores. One of the five largest retailers in the world by capitalization. The parent organization of the network is Closed Joint Stock Company (JSC) “Tander”. The headquarters is in the city of Krasnodar. One of the few retail chains not equipped with payment terminals.
Russian retail company " Magnet»
Firm dates its history back to 1994, when its current owner Sergei Galitsky founded organization for trade in household chemicals. The very first Magnit store was opened in 1998 in Krasnodar at the address st. Tyulyaeva, 8. The retail network developed rapidly, reaching 1,500 stores by the end of 2005. Since 2006, the development of a network of hypermarkets began.
At the end of December 2008, the Magnit network was included in the list of companies that will receive government support during the crisis.
Foundation of the organization sale household chemicals S.N. Galitsky
Tander becomes one of the leading official distributors of household chemicals and cosmetics in Russian Federation
The decision was made to enter the food retail trade
1998 - 1999: Entry into retail market food
Opening of the first grocery store in Krasnodar
Experimenting with format
The stores are united into the Magnit retail chain
2001 - 2005: Intensive development with the aim of taking a strong position in market
Rapid regional development: 1,500 stores at the end of 2005
Adoption of IFRS
Motivational remuneration system
2006 - 2009: Further development of the traditional format. Transition to multi-format
Leader of Russian food retail by number of customers
In 2006
Hypermarkets
An independent director was elected to the Board of Directors
An Audit Committee was established
A set of rules of corporate conduct has been developed and introduced
SPO in 2008, 2009
24 hypermarkets opened in 2007-2009
636 convenience stores opened in 2009 (total number of stores as of December 31, 2009 is 3,228)
2010-2012: Strong position in the sector
Accelerated growth - more than 1,000 convenience stores, 42 hypermarkets and 208 cosmetics stores opened in 2011
Successful placement of shares in December 2011, proceeds amounted to $475 million.
Large-scale investment program for 2012: capital plan expenses in the amount of about 1.1-1.4 billion dollars.
Planned opening of up to 800 convenience stores and 50-55 hypermarkets during 2012
Working to improve efficiency
The Magnit chain of stores is:
Market leader in the number of retail facilities and their coverage area in the Russian Federation - 64 branches, 1 representative office, more than 5,268 convenience stores and 98 hypermarkets, 5 Family Magnit stores and 351 cosmetics stores in more than 1,461 cities and locality. Currently, several dozen stores are opening per month;
More than 140,000 employees who, through their work, provide customers with the opportunity to purchase high-quality everyday goods at affordable prices;
The latest methods and technologies in the field of product distribution, sales, finance and personnel policy, allowing you to effectively manage the organization and reduce the price of the product for the final acquirer;
A network of distribution centers throughout the European part of the Russian Federation, receiving product from large suppliers and preparing it for shipment to stores;
Company, which has a large fleet of vehicles and carries out intercity transportation of goods throughout the European part of the Russian Federation;
About 640 private label products.
Controls
Board of Directors:
1. Pombukhchan Khachatur Eduardovich - Chairman of the Board of Directors
2. Harutyunyan Andrey Nikolaevich
3. Butenko Valery Vladimirovich
4. Galitsky Sergey Nikolaevich
5. Zayonts Alexander Leonidovich
6. Makhnev Alexey Petrovich
7. Shkhachemukov Aslan Yurievich
Audit Committee of the Board of Directors:
1. Zayonts Alexander Leonidovich - Chairman
2. Makhnev Alexey Petrovich
3. Shkhachemukov Aslan Yurievich
Personnel and Remuneration Committee of the Board of Directors:
1. Makhnev Alexey Petrovich - Chairman
2. Butenko Valery Vladimirovich
3. Zayonts Alexander Leonidovich
Governing body:
1. Galitsky Sergey Nikolaevich - Chairman
2. Barsukov Alexander Pavlovich
3. Shaguch Lyubov Azmetovna
4. Churikov Nikita Aleksandrovich
CEO
Galitsky Sergey Nikolaevich
The Magnit chain of stores is
Development strategy
Achieving the maximum coverage area of the Magnit store chain:
Strategic direction- opening stores in cities with a population of less than 500 thousand people - where 73% of the urban population of the Russian Federation lives;
The target audience of the “convenience store” is middle-income buyers, which makes it possible for the Magnit chain to penetrate small cities and towns.
Further development of the network focuses on strengthening the position of the Magnit network in the Ural and Central regions:
Price reduction strategy for regional expansion;
Availability of sufficient funds to ensure the opening of at least 250 stores per year.
Maintaining industry leadership in control costs:
Further improvement of the efficiency of the logistics system.
Magnit stores"have become part of the lives of millions of our fellow citizens. More than 5,000 convenience stores throughout the European part of the Russian Federation offer a full range of everyday goods at affordable prices. The use of high-tech equipment and modern technologies in all areas of business helps to achieve a balance between price and quality of goods in Magnit stores. opens Magnit stores not only in cities, but also in small towns, providing residents goods widespread consumption and new jobs. The company does not use a franchise, which allows it to maintain a uniform standard of quality of goods and service in all stores of the chain. The company is stable and constantly developing. The Magnit retail network in 2011 amounted to about 11.4 billion US dollars.
In 2012, the company plans to open about 800 stores in different regions of the Russian Federation.
In 2006, as a result of an analysis of customer needs, a decision was made to open stores of a new “family hypermarket” format. Hypermarkets "Magnit" offer customers a wide range of consumer and industrial products for the whole family. Magnit hypermarkets are medium format; they save not only time, but also customers’ time, allowing you to buy everything you need in an average of 40 minutes. In response to customer needs, the organization is constantly improving range goods and services. To ensure the quality of semi-finished products and ready-made dishes in demand on the market, Magnit hypermarkets are opening their own full-cycle production - a meat shop, a culinary department, a bakery and a confectionery shop.
The first Magnit hypermarket was opened in Krasnodar in October 2007; in 2008 there were already 14 of them!
Today the organization has 101 hypermarkets, including in small towns where no large retail chain is present.
In 2012, the company plans to open more than 50 hypermarkets in different regions of the Russian Federation, which means that hundreds will appear in these cities work places for specialists of various professions.
Distribution centers are the largest enterprises companies. Around the clock, the organization’s 17 distribution centers receive product from large suppliers Russian Federation and from different countries world and prepare it for sending to stores and hypermarkets. To maintain the high attractiveness of the company's stores, the Magnit retail chain has been developing its own products of appropriate quality and at the most reasonable prices since 2010.
Modern technologies and equipment, automated accounting systems and proprietary IT developments allow the organization’s distribution centers to uninterruptedly supply goods to more than 5,000 stores and 101 hypermarkets of the Magnit retail chain throughout the European part of the Russian Federation.
Motor transport OJSC "Magnit" is one of the largest in Europe, it includes 17 motor transport enterprises in different regions of the Russian Federation. More than 9,200 employees of the transport division provide daily delivery goods to Magnit stores and hypermarkets.
The company's fleet includes more than 3,000 new heavy-duty trucks cars MAN brand (Magnit retail chain is MAN’s largest customer in the world). Our trucking companies provide a full service cycle cars: modern repair shops, gas stations, car washes, high-tech logistics centers, catering establishments.
The motor transport enterprise is a large transport enterprise in the country that carries out intercity transportation of goods throughout the European part of the Russian Federation, the Urals, the Volga region, as well as international transportation of goods from such countries Europe like Poland, Serbia, Belgium, Spain.
In 2010, the management of the Magnit retail chain made a decision to develop the non-food segment of goods and developed a new store format - "Magnet cosmetics". The first store of the new format was opened at the end of 2010. Analysis work store showed that the organization’s new line of business is in demand in the market. About 300 Magnit-Cosmetic stores have already been opened. In 2012, it is planned to open more than 500 stores of the new format.
The parent organization of the Magnit retail chain is the command center for all business areas of the Magnit retail chain, located in Krasnodar. Strategy is developed here work for several years ahead, ambitious plans are set and achieved throughout the Russian Federation.
Today, the parent company employs more than 4,000 employees - specialists in the field of procurement, transport, logistics, economics and other specialties, which allow them to effectively manage a team of 150,000 employees. Net retail revenue for 2011 amounted to about 11.4 billion. American dollars.
What's happened goods of own trade marks? These are goods produced by leading Russian and foreign enterprises specifically for our network. Why is this beneficial for buyers? First of all, due to low prices!
It works like this:
Starting to produce our own products trademark, manufacturers receive a stable and constant distribution channel, and therefore optimally loaded production facilities. At the same time, the initial cost of products is reduced, and there are no advertising, distributors and intermediaries. As a consequence of all this, the final
TASS DOSSIER. On February 16, 2018, at the Russian Investment Forum in Sochi, the founder, CEO and main owner of the Russian retail chain Magnit, Sergei Galitsky, entered into an agreement with VTB to sell the bank a controlling stake in the retailer - 29.1% of shares - for 138 billion rubles.
It is expected that in the near future the post of general director of Magnit will be taken by the chairman of the board of directors Khachatur Pombukhchan.
"Magnit" is one of the largest retail companies in Russia and Europe. As of the beginning of 2018, there were 16 thousand 350 stores under the management and brand of Magnit, including 243 hypermarkets. In total, the company operates in 2 thousand 665 cities of Russia. The largest number of stores are opened in the Southern, North Caucasian, Volga and Central federal districts. The company has one of the largest transport and logistics networks in Russia. "Magnit" ranks 1st among Russian retailers in terms of revenue (according to the company "InfoLine-Analytics") and 7th place in Russia among all Russian companies (according to the RBC-500 rating). Registered in Krasnodar.
Story
The founder of the company is entrepreneur Sergei Galitsky. In July 1995, together with his partner Alexei Bogachev, he created the company "Tander" (now a joint-stock company, JSC "Tander") and became its general director. Initially, the company was engaged in wholesale supplies of perfumes in the southern regions of Russia. In 1998, the company opened the first retail supermarket "Magnit" in Krasnodar. Subsequently, stores were created in other cities, mainly in the south of Russia. Galitsky avoided competition with large retail chains by developing business in small towns and positioning his outlets as neighborhood stores with low prices. In the early 2000s, they were united into a retail chain called Magnit.
In 2003, Galitsky registered Magnit OJSC (now PJSC), which received 100% of Tander shares.
In 2006, Magnit listed its shares on the stock exchange, and with the proceeds the construction of the chain's hypermarkets began. Since 2010, the company has been developing a network of Magnit-Cosmetics retail stores. In its stores, "Magnit" sells a range of products of its own brands: "Family Secrets", "Master Shine", "Northern Harbor", "Saving Reasonably", "Trading House Smetanin", etc.
Indicators
At the end of the last reporting year of 2016, Magnit’s consolidated revenue according to international financial reporting standards amounted to 1 trillion 74 billion rubles. (an increase of 4.6% compared to 2015), net profit amounted to 1.14 billion rubles. (Before this, Magnit showed a net loss for the last three years).
According to Spark-Interfax, Magnit accounts for 25% of the revenue of all retail trade in the Russian Federation and 22% of the revenue of all companies registered in the Krasnodar Territory.
Management
Since 2006, Sergei Galitsky has been the general director of Magnit, and since 2010, also the chairman of the board. Chairman of the Board of Directors - Khachatur Pombukhchan.
Owners
At the end of the third quarter of 2017, Galitsky owned 35.11% of the company’s shares. The largest minority shareholder is the American investment company OppenheimerFunds Inc. More than 50% of the retailer's shares are traded on the open market. Current market capitalization is about $10 billion.
PJSC "Magnit", the largest Russian grocery retailer (the "Company"; MOEX and LSE: MGNT), presents unaudited results of operations for 2015 in accordance with IFRS 1.
During 2015, the Company opened (net) 2,378 stores (1,250 convenience stores, 29 hypermarkets, 58 Family Magnit stores and 1,041 drogerie stores) and increased its retail space by 22.92% from 3,590. 64 thousand sq. m. at the end of 2014 to 4,413.72 thousand sq. m. m. at the end of 2015. At the same time, the total number of stores in the chain as of December 31, 2015 was 12,089 (9,594 convenience stores, 219 hypermarkets, 155 Magnit Family stores and 2,121 drogerie stores).
The Company's revenue increased by 24.50% from RUB 763,527.25 million. for 2014 to 950,613.34 million rubles. for 2015. The growth in net revenue is associated with an increase in retail space and an increase in comparable sales by 6.21%. Gross profit increased by 22.81% from RUB 220,520.56 million. up to 270,821.52 million rubles. Gross margin for 2015 was 28.49%.
EBITDA increased by 20.95% - from 85,909.67 million rubles. for 2014 to 103,911.29 million rubles. for 2015. The EBITDA margin for 2015 was 10.93%, which is 32 bp. p. lower than the same figure for 2014, which amounted to 11.25%. The EBITDA margin for the 4th quarter of 2015 was 11.07%.
The Company's net profit for 2015 increased by 23.40% and amounted to RUB 58,846.66 million. against 47,685.84 million rubles. for 2014. The net profit margin for 2015 was 6.19%.
Key operating indicators of the Company for the 4th quarter and 12 months of 2015:
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4Q 2015 |
4Q 2014 |
Growth |
12M 2015 |
12M 2014 |
Growth |
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Number of open stores, NET |
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convenience stores |
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hypermarkets |
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family magnet |
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drogerie stores |
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Total number of stores |
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convenience stores |
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hypermarkets |
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family magnet |
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drogerie stores |
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Total retail area, thousand sq.m. |
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convenience stores |
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hypermarkets |
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family magnet |
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drogerie stores |
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Increase in retail space, thousand sq.m. |
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convenience stores |
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hypermarkets |
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family magnet |
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drogerie stores |
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Number of buyers, million |
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convenience stores |
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hypermarkets |
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family magnet |
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drogerie stores |
LFL indicators
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Formats |
4Q 2015 - 4Q 2014 2 |
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# stores |
Average check |
Revenue |
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Convenience stores |
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Hypermarkets |
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Magnet Family |
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Total for the Company |
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Formats |
12M 2015 - 12M 2014 2 |
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Revenue |
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Convenience stores |
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Hypermarkets |
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Magnet Family |
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Total for the Company |
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1 According to management accounting data
2 The base for calculating LFL indicators includes stores of all formats that have operated for at least 12 months before the start of the last month of the reporting period, i.e. open until December 1, 2014.
According to the positioning of the chain manager, Magnit supermarkets represent places for the sale of food and non-food products at affordable prices, aimed at middle-income people.
Pyaterochka from X5 retail group, which is considered the main competitor of Sergei Galitsky’s Magnit, also operates in the food retail niche with a similar concept.
As of the end of 2013, the network included 8,093 retail outlets. Of these, 7,200 are in the “near-home” supermarket format, 161 “Magnit” hypermarkets, 46 “family” and 686 points under the “Magnit Cosmetic” banner. The coverage geography is also quite large - from Pskov in western Russia to Nizhnevartovsk in the east of the country, as well as from northern Arkhangelsk to southern Vladikavkaz.
Who is Sergei Galitsky?
Sergei Nikolaevich was born on August 14, 1967 in the village of Lazarevskoye, Krasnodar Territory, and before his marriage he had a different last name - Arutyunyan.
In addition to Magnit, the businessman also owns the Krasnodar football club. Under the leadership of Sergei Galitsky, he achieved significant progress, reaching the Premier League in 2011.
The entrepreneur, as a typical Soviet generation, served in the army from 1985 to 1987, and then, having already entered Kuban State University, got a job in one of the Kuban commercial banks. In 1993, Sergei Galitsky graduated from the Faculty of Economics and National Economic Planning and received a diploma in finance and credit.
Then the businessman’s career developed very rapidly and already in 1994 he became deputy manager of the bank, which he joined only in his second year of study.
The Thunder company, which manages the Magnit network, began its existence in 1995, and by 2001, Sergei Galitsky’s network reached 250 retail outlets and became the largest in Russia.
According to Finance magazine, Sergei Galitsky's personal wealth as of February 2010 was estimated at $2.65 billion. Then, in 2011, the businessman took 24th place in the Forbes TOP of the 200 richest businessmen in Russia.
Galitsky’s company developed very rapidly and already in 2006, Magnit shares began to be traded on the RTS and MICEX. The regional Kuban authorities also appreciated the businessman’s merits: in 2011, the Governor of the Krasnodar Territory issued a Decree awarding the owner of Magnit the title of “Hero of Labor of Kuban.”
Currently, the businessman is also constructing the Krasnodar stadium, which, after completion of construction, will become the largest structure of its kind in the Southern Federal District.
Story
| Years | Description | |
|---|---|---|
| 1994-1998 | Founding of a company selling household chemicals by S. N. Galitsky Tander becomes one of the leading official distributors of household chemicals and cosmetics in Russia The decision was made to enter the food retail market |
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| 1998-2001 | Opening of the first grocery store in Krasnodar Experimenting with format The stores are united into the Magnit retail chain |
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| 2001-2005 | Rapid regional development: 1,500 stores at the end of 2005 Adoption of IFRS Strict financial control Motivational remuneration system |
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| 2006-2009 | Leader of Russian food retail by number of customers IPO in 2006 Start of construction of hypermarkets An independent director was elected to the Board of Directors An Audit Committee was established A set of rules of corporate conduct has been developed and introduced SPO in 2008, 2009 24 hypermarkets opened in 2007-2009 636 convenience stores opened in 2009 (total number of stores as of December 31, 2009 is 3,228) |
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| 2010-2012 | Opening of the first Magnit Cosmetic store on December 20, 2010 A project has been launched to develop a new area of activity - growing vegetables. In 2011, the first crop of cucumbers and tomatoes grown in the company’s own greenhouse complex was harvested and sold. Acceleration of growth rates: in 2011, 1,004 convenience stores, 42 hypermarkets and 208 cosmetics stores were opened, in 2012 - 1,040 convenience stores, 36 hypermarkets, 17 Family Magnit stores and 482 cosmetics stores Expansion of the network's geography - opening retail outlets in Siberia and the Urals Successful placement of shares in December 2011, total proceeds amounted to $475 million. An internal record was set for business capitalization; the value of the company's shares on the London Stock Exchange at the end of 2012 exceeded $21 billion. |
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| 2013-2015 | In 2013, the Magnit retail chain became the absolute leader in Russian retail. For the first time in 15 years after the opening of the first store, Magnit became the largest company not only in terms of the number of stores, retail space, growth rates and efficiency, but also in terms of sales volume. In 2015, Magnit was one of the three largest private companies in Russia. The company also delivered the largest job growth in 2014. October 2, 2015 Magnit announces the launch of an industrial park project in Krasnodar. The company signs an investment agreement on the creation of a park with the governor of the Krasnodar Territory at the Sochi-2015 Forum. |
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| 2016 | The company has updated the concept of convenience stores. The first retail outlet in the redesign opened in Krasnodar. 3 Magnit distribution centers were put into operation: in Dmitrov, Orenburg and Kemerovo. The Magnit Cosmetics chain became the fastest growing company of the year in the Non-Food segment and received the Russian Retail Awards 2016. The company hired its thousandth employee with disabilities. Magnit became one of the first Russian retailers to provide customers with the opportunity to pay for goods using Apple mobile devices. The thousandth self-service cash register has been installed. Together with the Russian office of Disney, a large-scale Star Wars marketing campaign was implemented in the chain’s stores, as part of which customers received 100 million figurines and tokens of the characters of the saga. The promotion covered more than 7,500 stores in the chain. |
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| 2017 | Magnit opened its 16,000th store. The concept of Magnit Family format stores has been updated. Testing of the new format of Magnit-Opt stores has begun. Two distribution centers were put into operation: in Kirov and Murmansk. The logistics complex in the Murmansk region became the company’s first such facility beyond the Arctic Circle. It became the retailer's 37th distribution center. "Magnit" launched a new format "Magnit Pharmacy". The retail chain opened the largest mushroom complex in Russia for growing champignons, thus the company continues to develop its own production. Magnit's fleet was replenished with the 6,000th MAN vehicle. According to data, as of December 2017, the retailer has the largest fleet of trucks of this brand in the whole world. The company was included in the list of the largest enterprises in Russia according to the RAEX (Expert RA) agency. The retail chain held several large-scale loyalty promotions for customers: “Fissler Knives”, “Easy to Collect, Fun to Play” with characters from the cartoon “Despicable Me 3”, “Simply Give Joy”, “Little Heroes” with DreamWorks cartoon characters. One of the largest was the “Simple Build, Fun to Play!” program, conducted in collaboration with Universal Pictures. During the campaign, more than 300 million cards were issued. The project covered more than 12,000 stores in the chain. |
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| 2018 | VTB Group entered into the capital of the Magnit company. An agreement was signed with the owner of the network Sergei Galitsky to acquire a 29.1% stake from him Sergey Galitsky resigned as CEO and member of the Board of Directors. Khachatur Pombukhchan was elected head of the company and chairman of the board. Magnit, Russian Post and VTB signed a memorandum of strategic partnership. "Magnit" held a large-scale promotion for buyers, the ambassador of which was one of the best football players in the world - Ronaldinho. “Magnit” became the largest network in the country selling goods with the symbols of the FIFA 2018 TM in the year of the FIFA World Cup in Russia. Magnit became the only Russian retailer in the list of the world's largest public companies in the Forbes Global 2000 rating. Olga Naumova became the general director of the Magnit retail chain; Khachatur Pombukhchan notified the company of his resignation. Magnit and Russian Post opened the first points of sale in post offices of the Krasnodar Territory, Ryazan and Ivanovo regions. The pilot project was considered successful, and the parties agreed on its development. Magnit was included in the top ten most valuable Russian brands according to Brand Finance. Magnit acquired the pharmaceutical distributor SIA Group. Magnit presented the company’s development strategy until 2023. Magnit opened its own Industrial Park, the first resident of which was the Kuban Bread Products Plant. At the end of 2018, the Magnit Cosmetics chain became the largest player in the retail market of cosmetics and perfumes. |
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| 2019 | The company launches a new cross-format brand Olga Naumova leaves the company, Jan Dunning is appointed general director The 5,000th Magnit Cosmetics store opens The 20,000th store in the "Magnit "U Dom"" format opens |
The name "Magnit" - a shortened phrase for "Low Tariff Store" - was coined by a company employee in 2000. In 2001, Magnit introduced the first products of its own brand (cheeses “Ah, Polinka!” and juices “Nikitina Usadba”). Subsequently, private label goods will account for 9% of the total turnover and will serve as an impetus for launching our own production to supply the chain stores. In 2001, the Magnit chain grew to 159 stores, becoming the largest in Russian retail. In 2002, stores opened in Moscow. In 2003, as part of preparations for entering the stock exchange, OJSC Magnit was established. JSC Tander acquires the status of an operating company.
In 2004, the chain was relaunched, resulting in the appearance of a convenience store format. At the same time, wholesale sales of household chemicals and perfumes are completed, the capacity of the wholesale trade center in Krasnodar is transferred to the distribution center in Kropotkin. 6 years after its inception, the Magnit chain has grown to 1,000 stores throughout the country. In 2005, Magnit owned 1,500 stores. The company is ahead of Pyaterochka in terms of revenue.
In 2006, an initial placement of Magnit shares was carried out on the Moscow MICEX and RTS exchanges. The funds received allowed the company to enter the market with a new format: the first three Magnit hypermarkets were opened in 2007. The company is also opening 3 hypermarkets under its brand and launching restyling. In 2008, Magnit additionally placed shares on the London Stock Exchange, directing the funds raised to 10 new hypermarkets of the chain and 300 new convenience stores. In 2009, direct import of products from companies with their own representative offices in Russia was established. A revolutionary solution for the domestic market made it possible to cut off the costs of intermediary services.
In 2010, the consulting company Deloitte included Magnit in the ranking of the 250 largest international retail chains. In the same year, the first drogerie-format store opened, Magnit Cosmetics. In 2011, the company created the Green Line greenhouse complex in the Krasnodar region for its own production of vegetables and herbs. In 2012, the first Magnit Family began operating - stores of this format have an area of about 1,500 sq.m., “intermediate” between hypermarkets and convenience stores. By the end of the year, the company owned 100 hypermarkets and 6,000 convenience stores. In 2013, Magnitenergo was launched - the first energy company in Russian retail, designed to supply chain stores. Reducing energy costs allowed Magnit to keep prices low. At the end of the first quarter of 2013, the company's revenue reached 131 billion rubles, which made it the leader in Russian retail.
In 2014, Magnit became the largest importer in Russia. At the same time, stores are equipped with terminals for cashless payments and self-service cash registers appear. The company begins to build its own complex of greenhouses in the Krasnodar region. In 2015, the Magnit chain for the first time in Russia crossed the 10,000 store mark and demonstrated record growth rates. According to analytics, every 10th ruble is spent by Russian households at Magnit. In 2015, a total of more than 2,561 points were opened, which is equivalent to 7 stores per day.
In 2017, the number of distribution centers of the network increased to 36. The first points of the Magnit Pharmacy and Magnit Wholesale format were also presented. In the same year, the country's largest plant began operating, where champignons were grown. In 2017, Magnit took 3rd place in the Baker Tilly rating, which includes companies with a high level of intellectual capital. In 2018, sales points will open in Russian Post branches. In the same year, Magnit became one of the largest public companies in the Forbes Global 2000 ranking, becoming the only Russian retailer on this list. As of June 2018, the network consisted of 16,960 stores in 2,808 localities in 7 federal districts.
At the beginning of June 2018, Magnit announced the start of negotiations with Marathon Group regarding the acquisition of SIA International Ltd JSC, the pharmaceutical distributor of SIA Group. In October of the same year, the decision to purchase was made at a meeting of the company's board of directors. It was noted that the transaction amount - no more than 5.7 billion rubles, will be paid in the form of Magnit securities. Also, according to the agreement, Marathon Group undertakes not to sell shares of Magnit for at least 3 years after the completion of the transaction. The acquisition was part of the strategy for the development of the Magnit Cosmetics and Pharmacies business areas.
In June 2018, Magnit, together with Russian Post, began sales at test points at post offices in Moscow, the Krasnodar Territory and the Ryazan Region.
On February 21, 2019, the Magnit chain of stores announced that they were updating their branding to a new cross-format brand. Thus, all the chain’s stores will be designed in the same style and united by the new slogan “Let’s be friends with families!”
New development strategy
The company's development strategy until 2023 was announced in September 2018. The company plans to increase its share in the Russian market from 6 to 15%. The main work will be aimed at:
- Creation of new standards for affordable consumption;
- Building a positive shopping experience;
- Ensuring the key needs of customers through the capabilities of Magnit chain stores;
- Leadership in presence in each region of the Russian Federation;
- Implementation of a customer-centric operating model.
To achieve this, it is planned to improve product quality and adapt the range to the needs of people in different locations. The convenience of stores will also be improved without increasing prices due to greater company efficiency. Magnit’s work is aimed at strengthening its position in Moscow and St. Petersburg, developing customer-friendly “small” formats and supermarkets.
Financial indicators
Since June 26, 2019, the post of General Director has been occupied by Jan Dunning (previously, the position of General Director was held by Olga Naumova, who left the company in the second quarter of 2019). Also, since January 17, 2019, Dunning has held the position of president of the Magnit network. Board membersRegions of presenceMagnit chain stores are represented in 7 federal districts: Magnit family of storesPJSC Magnit owns more than 20,000 retail outlets in 5 formats - “At Home”, “Family”, “Drogery”, “Pharmacy” and “Wholesale”. Magnet at homeIn 2004, after the relaunch, all Magnit discounters were reformatted into convenience stores. They are located close to residential buildings and main flows of people - pedestrian or transport. The basis of the assortment is food and consumer goods. Convenience stores range in area from 200 to 600 square meters. As of the second quarter of 2019, the Magnit chain consisted of 14,231 stores of this format. Magnet FamilyThe “Family” format differs from the “close to home” segment in its expanded range, including non-food products, as well as its larger area - on average 1000-1500 sq.m. New format “Family Plus” - stores with an area of 1500-3000 sq.m. , in which, in addition to making purchases, participation in tastings and promotions is provided. Their assortment is divided into “cubes” - specialized departments. As of the first quarter of 2019, the Magnit chain consisted of 467 stores of this format. Magnet cosmeticsDrogeri stores have an area of 200-250 sq.m. Their assortment includes mainly non-food products for beauty and home care - cosmetics, household chemicals, household supplies. As of the second quarter of 2019, the Magnit Cosmetic network has 5,187 points of sale. The drogerie assortment includes 10,000 items. Magnit PharmacyThe first 4 Magnit Pharmacy locations opened in Krasnodar in 2017; over the next year, the network grew to 51 locations. Pharmacies offer an assortment of more than 3,500 thousand products - pharmaceuticals, cosmetics, baby food, hygiene products, and medical products. Magnit-OptThe first Magnit Wholesale stores were opened in the summer of 2017. They are designed for entrepreneurs and private buyers who prefer to purchase goods in large quantities. The assortment of stores in this format includes about 1.5 thousand items. At the end of 2018, 12 Magnit-Opt stores operate in Arkhangelsk, Vologda, Gukovo, Ivanovo, Irbit, Kamenka, Kazan, Krasnodar, Novosibirsk, Ryazan, Saratov, Ulyanovsk, Ukhta. Magnet Evening "Magnit" opened the first alcohol market under the "Magnit Vecherniy" brand, a test store with an area of about 200 sq. m started working in Samara. In the near future, it is planned to launch test stores in Tatarstan and the Moscow region. Own productionIn 2011, Magnit launched its own greenhouse complex “Green Line” with an area of 130 hectares, located in the Krasnodar Territory, which became one of the largest in Eastern Europe. In 2017, the company launched a complex for growing champignons. The planned production capacity was 6.5 thousand tons of mushrooms per year. In 2015, at the international economic forum in Sochi, an investment agreement was signed on the creation of an industrial park in the village of Dorozhny, Krasnodar Territory. The area of the complex, which will house over 20 enterprises, is more than 236 hectares. By the end of 2020, more than 40 billion rubles will be invested in the development of the industrial park. In 2018, the first production of bakery products, Confectioner Kubani, one of the largest in the country, opened on the territory of the park. It will cover up to 60% of the network’s needs for pasta and bakery products. Own brandMagnit’s own brand products are produced specifically for the chain by Russian and foreign manufacturers. Magnit stores offer about 1,000 private label products. Among them are “Nut Grove”, “Eastern Guest”, Premiere of Taste, “Country Fair”, “Snowy Delicacy”, La Fresh, “Feast of the Sweet Tooth”, “Master Glitter”, “Family Secrets”, “Crystal Spring” , “Smetanin”, “Northern Harbor”, Lucky Days, “Casper”. In stores, such products are marked with the “Our Brand” price tag. LogisticsMagnit's logistics network is one of the largest in Europe. To optimize transportation and maintain the quality of storage of goods, Magnit created 37 distribution centers, the first one was opened in Krasnodar in 2003. Distribution centers are logistics complexes with warehouses with different storage conditions, administrative buildings, buildings of motor transport enterprises, repair shops, gas stations and car washes. In 2018, the total warehouse area of the DC was 1,640 thousand sq.m. The chain's stores serve 36 motor transport companies. The company's own vehicle fleet includes over 6,000 vehicles. In 2014, Magnit became the only retailer included in the top 10 Russian importers. In the first half of the year, the number of direct contracts with suppliers reached 744. The share of direct imports in revenue is 7%. IT and innovationMagnit entered the TOP 100 most innovative companies in the world. In 2018, the company signed a collaboration agreement with Samsung aimed at developing devices, technologies and solutions that improve customer experience and business process efficiency. For example, in 2018, network drivers were provided with tablets for automatic route construction and accelerated electronic document exchange. The electronic medical examination system allows you to quickly monitor the health status of drivers. In June 2019, at SPIEF, Magnit and 1C entered into an agreement to develop the company’s IT infrastructure, which will improve:
As part of SPIEF 2019, Magnit also signed an agreement with Microsoft: the software manufacturer will work on the comprehensive digitalization of business processes. One of the projects is aimed at building machine demand forecasting and, as a result, optimized supplies of fresh products to stores, including adapting the assortment to the characteristics of the market in different regions. StaffAccording to Forbes, Magnit is one of the largest Russian employers. According to data for the first quarter of 2019, Magnit has over 295 thousand employees. Of these, more than 200 thousand people work in stores, more than 35 thousand work in distribution centers. Largest employerThe company tops the ranking of the country's largest private employers. From 2011 to 2018, Magnit received the title of “Attractive Employer”, Superjob.ru award. The company opens 300 new jobs every week. A program of practical training and internships “Magnit: Young Generation” has been launched for university graduates and beginning specialists. As of July 26, 2019, the company has 300,000 employees. Of these, 78% are women and 22% are men. Working with employees with disabilitiesSince 2011, the company has been implementing the state program “Accessible Environment”, providing an adaptation system for workers with disabilities and providing them with workplaces with comfortable working conditions. The thousandth employee with disabilities was employed at Magnit in 2016. Partnership projectsTo ensure high quality customer service, Magnit is developing several partnership programs, including with Russian Post, automaker MAN and Samsung. Russian Post (ultra-small format)At the beginning of 2018, an agreement on strategic cooperation was concluded between Russian Post, VTB and Magnit. According to him, in an experimental format, several ultra-small Magnit stores were opened in Russian Post branches with an assortment of 200-600 products. In 2019, it is planned to open at least 2,000 retail outlets in Russian Post branches. Store formats will be adapted to villages and cities. MANMagnit cooperates with MAN, a manufacturer of body settings and trailers from Germany. The company is the automaker's largest customer. The vehicles of this company are the most popular in the network's fleet. In 2017, for a more flexible solution to transport and logistics problems, Magnit purchased over 700 TGL, TGM, TGX, TGS trucks. The MAN TGS road train with increased cargo capacity and reduced weight was developed by MAN specifically for Magnit in 2017. Russian RailwaysMagnit is the first retailer to use piggyback delivery technology in its logistics. Test combined transportation of goods by a loaded vehicle (truck with a semi-trailer) and railway made it possible to reduce the time and cost of transportation. This approach also reduces the negative impact on the environment and road infrastructure. As part of cooperation with FGK (a subsidiary of Russian Railways), Magnit plans to increase the number of railway platforms for transportation to 320 units. Contrailer delivery is already used in the Khanty-Mansiysk Autonomous Okrug and the Komi Republic. SamsungAt the St. Petersburg Economic Forum 2018, an agreement was signed between the Magnit and Samsung companies on their intention to cooperate and develop innovative technologies for retail. Their main goal is digital business transformation: the creation of mobile devices and the development of specialized solutions that meet the needs of retail. In particular, the agreement concerns the creation of technologies for retail trade, educational initiatives and interaction with partners. TatneftOne of the leading retail chains in Russia and one of the largest Russian oil companies in the country have begun a joint project at gas stations. Magnit opened compact stores at Tatneft gas stations with the most popular assortment among customers, numbering about 900 product items: confectionery, various types of coffee and other drinks, an expanded selection of non-food products, in addition, it is planned to offer customers fresh baked goods. Awards and prizes
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