Mar 25, 2009
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Carrefour to open 1st Moscow store in May

Mar 25, 2009

By Maria Kiselyova

MOSCOW, March 25 (Reuters) - French hypermarket chain Carrefour (CARR.PA) is on track to open its first store in Moscow in May, a long-awaited move by the world's No.2 food retailer into Russia, real estate sources told Reuters.

The French chain will lease space in a newly built mall for its first Moscow store although it is seeking to buy Moscow's top grocery chain Seventh Continent (SCON.MM), which has dozens of stores throughout the city, banking sources told Reuters last month.

"Carrefour will open up in the Filion trade centre as expected in May. The likely period is May 10 to 30," a source at the trade centre's developer said.

Carrefour spokesman Alexei Shavenzov said Carrefour "intends to serve the customers of the first hypermarket in Moscow in summer this year" but declined to specify the opening date.

According to Jones Lang LaSalle, the leasing agent for the trade centre, Carrefour will occupy 14,300 square metres of space on two floors of the mall, which will open in May.

It will neighbour franchised stores of Britain's Marks & Spencer (MKS.L), Spain's Zara (ITX.MC) and C&A, already present in Russia, as well as Russian sports goods chain Sportmaster and children's store Detsky Mir, part of the Sistema (SSAq.L) holding.

"Everything is signed, all (tenants) should open up," said Yulia Turukhina, head of marketing and public relations at Jones Lang LaSalle in Moscow.

Two sources familiar with Carrefour's negotiations on Seventh Continent, whose owner is faced with heavy debt repayments, said due diligence would be completed in May.

Meanwhile, the company also plans to open a hypermarket in the southern city of Krasnodar, a prosperous region on Russia's Black Sea coast.

Although Shavenzov declined to say when that store could be open, a source at a major retail chain said the Krasnodar store was expected to open in the next three months.

A top French competitor, Auchan, was among the first foreign hypermarket chains to hit Russia, opening its first Moscow store in 2002 and now has more than 30 stores. It has expanded widely in the provinces and plans to open another six stores this year.

Global retailers, many of whom missed their chance to expand on Russia's once-buoyant market during the 10-year oil-fuelled economic boom, are now taking steps to enter a sector which still has more growth potential than mature markets despite a downturn.

In March, Swedish fashion giant Hennes & Mauritz (HMb.ST) opened two stores in Russia and pledged to open at least two more by the end of 2010.

Wal-Mart (WMT.N), which is increasingly looking overseas to fuel expansion, last year joined the Russian retail lobby group, after hiring an executive to head its efforts to explore business opportunities in Russia and neighbouring markets.

Sources have said Wal-Mart hired 30 Russian office staff and is in acquisition talks with local chains that may need a cash injection to cope with the financial crisis. (Additional reporting by Maria Plis; editing by Mike Nesbit)

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