Leroy Merlin ups the pace in Russia

The French DIY chain Leroy Merlin (Groupe Adeo) plans an outright doubling of its involvement in Russia as against previous announcements. To achieve this the market leader intends to make an annual investment of ten billion roubles (€ 235 mio) in its network of Russian stores. Expansion is also scheduled for Ukraine. “We should like to open ten stores every year,” said Vincent Gentil, chief executive officer of Leroy Merlin Russia, in an interview with the leading Russian daily ‘Vedomosti’. According to him, the finance to the tune of some € 23.5 mio per store is to come solely from internal resources and loans from Russian banks, not from the parent company Adeo. Altogether his company has invested more than € 630 mio in its Russia business since 2004. Gentil perceives “very great potential” in the unsaturated Russian market, with its volume of more than € 21 bn and high annual growth rates (17 per cent in 2012). He believes there are special opportunities waiting in the regions. For instance, the model regional store in Tver that opened at the beginning of the year is doing outstandingly well. In terms of revenue, Leroy Merlin saw an increase of 38.7 per cent in Russia in 2012 to € 18.1 bn, more than double the figure achieved by second-placed Obi. At the beginning of 2013 the company had 22 large-format stores in operation in Russia. In the meantime that number has increased to 26 branches, only eight of which are rented, all the others being company-owned.