The paper wrote that the retailer was planning to conclude a contract to lease extensive areas in five Mega shopping centers from the Swedish furniture giant, IKEA. If the contract is concluded, the British company, which has 375 stores in its homeland and another 155 shops franchises in 28 other countries, will build the biggest chain of department stores in Russia.
An M&S spokeswoman, Sue Sadler, said that the first store would open in Moscow this fall, and in 2006 M&S intended to do what no European store network had dared to do: enter the Russian regions.
At first glance, the move is something of a surprise: the M&S brand is considered quite expensive and respectable in Europe. In Russia, M&S may only be compared with Finnish retailer Stockmann. Petri Anttila, Stockmann's regional director, was surprised by the M&S plans. He said his company had not entered the regions because it do not want to alter its 'capital' format - 10,000 square meters, which he said Stockmann believed would simply not catch enough affluent buyers in the regions.
Paul Price, the managing director of the Delta Private Equity investment fund, said the arrival of M&S was predetermined. He said Russia's retail market was the sixth biggest in Europe, and was growing at 15-20% a year, compared with 3-4% in European market.
Marina Voloshchuk, the international director of Russkaya Torgovaya Gruppa, or the Russian Trade Group, said that M&S, apart from going to the regions, had few other options, as all the good premises in Moscow had already been taken.
Besides, market watchers pointed to other incentives that may have made the retailer rush to Russia. M&S is not performing well on its traditional markets: its pre-tax profits fell by 19% year on year in 2004. In fact, the paper wrote that other department store operators were also coming to Russia.
