Restoring deliveries is only part of Roman Khomenko’s anticrisis plan for the chain.
Photo: Alexey Kudenko
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Brands Returning to Arbat Prestige
Shipments of Estee Lauder, L’Oreal and Procter & Gamble products to Arbat Prestige stores were resumed yesterday. The retailer had been selling the remains of last year’s stock all first quarter. Those brands account for 11.8 percent of the chain’s sales, with Estee Lauder and L’Oreal accounting for 5.15 and 4.4 percent, respectively. Roman Khomenko, who was appointed general director of the chain on May 19, has succeeded in extending the contracts with the suppliers. He declined to describe the terms of the agreements.
There are 95 Arbat Prestige stores in Russia and Ukraine. The Arbat Prestige chain’s receipts totaled $471.48 million in 2007. Estee Lauder, L’Oreal and Procter & Gamble products were the chain’s best sellers. Their deliveries were stopped at the end of the year, however, because main owner of the chain Vladimir Nekrasov had the unique right to sign contracts for it. Nekrasov is under arrest.
Restoring deliveries is only part of Khomenko’s anticrisis plan for the chain. Securities worth 1.5 billion rubles come due on June 20. Khomenko has acknowledged that some of the chain’s real estate may be sold to make that payment, possibly all 28 of the chain’s Ukrainian stores. The chain’s premises in the Atrium shopping center alone are estimated to be worth $8-11 million. Some of the property is mortgages, however. Analysts see a possibility that Arbat Prestige will default on its securities. They were selling for 65.35 percent of face value yesterday. In addition, Arbat and Co. owed banks 1.604 billion rubles as of the end of last year, and it owes Nomos Bank 95.137 million rubles. Those debts have to be paid before the end of the year.
www.kommersant.com
All the Article in Russian as of May 28, 2008
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