Rus­sian footwear chain plans IPO

Shoes & Accessories - - The Month That Was -

Obuv Ros­sii is op­ti­mistic about con­sumer de­mand and eq­uity mar­ket re­cov­ery. Rus­sian footwear busi­ness Obuv Ros­sii is plan­ning to an­nounce an ini­tial pub­lic of­fer­ing by the end of Septem­ber, to take ad­van­tage of a re­cov­ery in the coun­try’s eq­uity mar­ket and ris­ing con­sumer de­mand. It would be only the sec­ond IPO on the Moscow mar­ket this year: sen­ti­ment slumped in the spring as re­la­tions be­tween Rus­sia and the west soured but has im­proved in re­cent months thanks to the sta­ble oil price and as com­pa­nies have ad­justed to long-term sanc­tions. Obuv Ros­sii, the coun­try’s sec­ond-largest shoe chain, aims to an­nounce its in­ten­tion to float in the next few weeks, two peo­ple with knowl­edge of the plans told the FT. It is con­sid­er­ing a sale of a 30 per cent stake to raise about $100m. “Our plan is to have a pri­mary IPO to fund our in­vest­ment pro­gramme,” chief ex­ec­u­tive An­ton Ti­tov told the FT, with­out com­ment­ing on the ex­act timing. It would be the first list­ing in Moscow since toy re­tailer Det­sky Mir in Fe­bru­ary. Many thought that would be the start of a surge in pub­lic of­fer­ings, but in­vestors turned more cau­tious as hopes for rap­proche­ment be­tween Rus­sia and the new US ad­min­is­tra­tion foundered. Ti­tov shelved plans for a pre­vi­ously-an­nounced IPO in 2014 as a col­lapse in global oil prices and western sanc­tions against Rus­sia plunged the coun­try into fi­nan­cial cri­sis and re­ces­sion. But eco­nomic growth has re­turned strongly this year, help­ing to bring the mar­ket back from its spring lows. Rus­sia’s Rbs 1tn footwear mar­ket is ex­pect to grow by about 10 per cent a year for the next five years as con­sumer de­mand re­cov­ers to pre-cri­sis lev­els: in 2013 Rus­sians bought more than three pairs of shoes per per­son, but that fell to be­low two pairs in 2016. The mar­ket is very frag­mented and is dom­i­nated by small, in­de­pen­dent shops: the top ten footwear re­tail­ers have just a 13 per cent share.

Mr. John­son con­tin­ued say­ing the com­pany is ob­vi­ously dis­ap­pointed with the re­sults for the quar­ter and ded­i­ca­tion to work on strate­gies to quickly ad­just op­er­a­tions to a changed re­tail land­scape is re­quired. In this con­text it will be key to work with the ven­dor part­ners to iden­tify and cap­ture new trends faster. Net in­come for Foot Locker’s sec­ond quar­ter to­talled 51 mil­lion US dol­lars, or 0.39 US dol­lars per share, com­pared with net in­come of 127 mil­lion US dol­lars, or 0.94 US dol­lars per share in the same pe­riod of 2016. This re­sult in­cluded a 50 mil­lion US dol­lars pre-tax lit­i­ga­tion charge re­lated to a re­cent ap­peals court de­ci­sion in a law­suit against the Com­pany in­volv­ing the con­ver­sion of its pen­sion plan in 1996.

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