Russian footwear chain plans IPO
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.