Magnit is considering buying a network of cosmetics stores called Rainbow Smile, Interfax reports, citing anonymous sources from the company and the industry.
One of the interlocutors of the agency noted that the possibility of making a deal has been discussed on the market since December 2021. Another source said that now the supermarket chain is assessing the investment risks from the purchase and the financial condition of Rainbow Smile.
A representative of Magnit told Interfax that the company “does not comment on rumors,” and Smile of the Rainbow did not respond to an official request. The food giant has its own network of cosmetics and household goods stores, Magnit Cosmetics, which competes with Rainbow Smile.
The agency notes that Rainbow Smile does not have a single operating company. One of the structures of the retailer LLC Drogery Retail, whose revenue for 2020 amounted to 1.8 billion rubles, has been reorganizing since October 2021 and merging five new companies. The network includes about a thousand stores with a total area of more than 100,000 square meters, which are represented in 27 regions of the country.
The Magnit Cosmetic chain of cosmetics, perfumery and household goods stores is the largest market participant in the segment. In Russia, at the end of September 2021, there are 6,714 stores with an area of 1.5 million square meters. At the end of 2020, the network’s revenue amounted to 134.3 billion rubles, and by the end of September last year – 109.9 billion rubles.
In July 2021, Magnit made the largest merger in Russian retail and bought the Dixy group from Mercury Retail Group for 97 billion rubles. At the end of September, the Dixy group united 2,477 stores.