Malon Fashion Group Melon Fashion Group JSC brands Zarina, befree, Love Republic
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Owners
For 2017, Malon Fashion Group operates almost 700 stores of popular clothing brands Befree, Zarina and Love Republic in Russia and the CIS countries.
The company carries out a full cycle of fashion business activities, from modeling (design), production, logistics to distribution, sale, promotion of women's and men's clothing and accessories.
The headquarters is located in St. Petersburg. The company's turnover, according to 2017, is 15 billion rubles. per year.
Performance indicators
2023: Revenue growth by one third to RUB 61.48 billion
Revenue of Melon Fashion Group (brands Zarina, Befree, Love Republic, Sela, Idol) in 2023 amounted to 61.48 billion rubles against 46.07 billion rubles a year earlier. The company's net profit in comparison with the same segments of time decreased from 7.3 billion to 7.04 billion rubles. This is evidenced by the data of the Kontur. Focus service, which TAdviser got acquainted with in May 2024.
From these materials it follows that the cost of sales of Melon Fashion Group in 2023 reached 26.74 billion rubles, increasing from 19.85 billion rubles in 2022. The retailer's gross profit increased from 26.22 billion to 34.74 billion rubles, and profit from sales rose from 10.68 billion to 10.99 billion rubles.
The group's commercial expenses in 2023 amounted to 22.02 billion rubles, which exceeds the same costs a year ago at 14.29 billion rubles. The company's management expenses increased from 1.25 billion to 1.73 billion rubles.
Accounts payable to Melon Fashion Group in 2023 amounted to 11.54 billion rubles against 8 billion rubles a year earlier. Accounts receivable increased from 1.69 billion to 2.47 billion rubles.
As a representative of Melon Fashion Group told Vedomosti, in 2023 the company opened and relocated (to large areas) over 200 stores, as a result of which the group managed more than 920 stores in Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The company also noted that in 2022-2023. Melon Fashion Group doubled the formats (areas) of stores of four brands of the portfolio and expanded the range. So, Zarina has a male direction ZRN Man, Love Republic has a premium collection, shoes, underwear and sports underwear, Sela has clothes for babies and men. In addition, in September 2023, the company launched the fifth Idol brand in its new affordable premium segment.
2022: Revenue growth by 23% to RUB 46.04 billion
Net profit of Melon Fashion Group in 2022 reached 7.8 billion rubles, which is 2.2 times more than profit a year ago (3.5 billion rubles). The retailer's revenue rose by 23% and amounted to 46.04 billion rubles against 37.5 billion rubles in 2021. The company released such data in early July 2023.
 | Last [2022] was a truly turning point in the fashion industry and for the Melon Fashion Group. In our plans and dreams, we painted only goals, but overnight we had to redraw everything. An interesting situation has developed on the market: some of the brands have left, some have remained. Sanctions, broken supply chains, uncertainty and information noise have formed a new undeveloped field of fashion retail. Having revised our approaches and strategic plans, we decided to act, - comments Mikhail Urzhumtsev, CEO of Melon Fashion Group. |  |
In the summer of 2022, Melon Fashion Group decided to scale the business, doubling the concepts of all brands. So, Zarina increased the format to 600 - 1,000 sq. m, Befree - to 1,000 - 2,500 sq. m, Love Republic - to 500 - 1,000 sq. m, Sela - to 700 - 1,200 sq. m. The first openings of large format stores took place in November 2022.
The launch of 136 new and relocated stores increased the retail chain to 867 in Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The company continued to actively develop the online direction and partnership with marketplaces. Sales shares in offline and online channels were distributed by 68% and 32%, respectively, according to her press release.
Melon Fashion Group's offline retail revenues in 2022 reached 31.24 billion rubles against $25.41 billion a year earlier. E-commerce revenue rose from $12.09 billion to $14.8 billion.[1]
History
2023
GEM Capital bought stake in Melon Fashion Group
Swedish Eastnine AB signed an agreement to sell about 36% of the retailer Melon Fashion Group (MFG, manages the Zarina, befree, Love Republic and Sela store chains) for 15.6 billion rubles. The buyer of assets is GEM Invest LLC (an investment company from Gazprom Anatoly Paliy Gem Capital). The deal is expected to close within two weeks, Eastnine said in early August 2023.
The agreement will take place in several stages approved by the FAS Russia and the government commission for control over foreign investments. Eastnine's investment in MFG as of June 30, 2023 amounted to approximately 162 million euros.
| | The completion of the transaction involves significant uncertainties and risks, for example, the allocation of funding, the cooperation of financial institutions and the risk of further sanctions and actions by the authorities, warned in Eastnine. | |
In May 2023, Interfax, citing a source, said that Gem Capital received permission from the Russian authorities to acquire a little more than 80% of the shares of Malon Fashion Group JSC. Their cost was estimated at €500 million. The deal will be two-stage, the source said. The Cypriot I.G.M. Manufacturing Trust Ltd, co-founder of MFG David Kellerman, will first have to buy the assets of Melon Fashion Group from the Swedish Eastnine AG and MFG Intressenter, as well as from foreign minority shareholders with less significant packages. Thus, it will increase its stake in the company from 34% to 82%, the publication said.
Further, the Russian legal entity Gem Capital will buy out the entire stake in I.G.M. Manufactrust. The authorities ordered to issue part of the payment in the form of installments for several months and stretch the purchase of currency on the market for the same period, which is needed to pay for the transaction, Interfax reported in May 2023.[2]
Termination of the transaction between AFK Sistema and Melon Fashion Group
AFK Sistema refused to buy Melon Fashion Group (MFG). This was announced on March 5, 2023 by the Swedish group Eastnine, which owns 36% of the retailer MFG. The AFC confirmed the termination of the transaction.
| | The agreement on the sale of Eastnine's stake in MFG PJSC AFK Sistema has been terminated. Eastnine will continue to search for a way out of its investments and is in dialogue with potential buyers, the Eastnine website says. | |
The Swedish company added that as soon as it became clear that the terms of the deal would not be fully fulfilled, the agreement "was terminated by the parties by mutual agreement." It is noted that Eastnine hoped to close the deal in the first quarter of 2023.
Earlier, AFK Sistema announced its readiness to redeem up to 100% of the authorized capital of Melon Fashion Group JSC. The Russian state corporation offered to redeem shares at the price of the transaction announced on October 19, 2023. In total, the company was ready to spend about 33 billion rubles to buy a retailer. AFK Sistema planned to expand its business in the retail market. Previously, the company was a shareholder of Detsky Mir. By March 2023, her portfolio also includes one of the largest marketplaces in Russia - Ozon.
By the beginning of March 2023, in addition to Eastnine, the owners of Melon Fashion Group are its chairman of the board of directors David Kellermann (40%) and CEO Mikhail Urzhumtsev (6%), as well as East Capital Holding. The group of private investors has the remaining stake.
As of March 2023, Melon Fashion Group, together with subsidiaries and affiliates, is one of the largest clothing retailers in Russia, managing the brands Zarina, befree, Love Republic and Sela. The Group operates in 181 cities in Russia, Kazakhstan, Armenia and Belarus.[3]
2022: AFK Sistema announced the purchase of 47.7% of Malon Fashion Group for 15.8 billion rubles
On October 19, 2022, AFK Sistema announced the purchase of 47.7% of Melon Fashion Group (MFG; manages the brands Zarina, Befree, Love Republic and Sela) from the Swedish companies Eastnine and East Capital Holding AB and a group of private investors for 15.8 billion rubles.
AFK Sistema will finance the deal with its own and borrowed funds. The closure of the transaction is expected until the end of 2022 after receiving all the necessary regulatory approvals, as well as the fulfillment of other preventive conditions provided for by the parties to the transaction, the press service of the corporation reports.
AFK Sistema President Tagir Sitdekov noted that Melon Fashion Group demonstrates high business growth rates and positive profitability dynamics, and the deal fully corresponds to an investment strategy focused on consolidating high-quality assets and leveraging opportunities arising in the process of market transformation. The press service of the company added that Sistema takes into account the possible interest of other shareholders in selling shares and is ready to consider the possibility of buying them out.
After the transaction, AFK Sistema becomes the largest shareholder of Melon Fashion Group with a 47.7% stake. The next most important shareholders are the founder and CEO of the company David Kellermann (40%) and Mikhail Urzhumtsev (6%). The remaining stake is held by a group of private minority investors.
{{quote 'We appreciate the development strategy and have great respect for MFG management. MFG has one of the most professional teams in the retail market, under whose leadership the company has been demonstrating impressive dynamics of operating and financial performance for many years, the press service of AFK Sistema said[4] }}
2021: Delays in deliveries from China due to the queue of trucks at the border
Russian clothing and footwear companies faced delays in September 2021 in the supply of their products from China. This was told in Melon Fashion Group (brands Zarina, befree, Love Republic and Sela), networks "Econica" and Akhmadullina Dreams. On the Sino-Russian border, a queue of more than 1,000 trucks has formed, and for a month trucks have not been able to pass border control.
Notes
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