"Magnet" Shuts Down Supermarkets
"Magnit's exit from big-box stores could be imminent, with Lenta stepping into the spotlight for potential takeover. Details about the deal are still under wraps - Magnit might sell its entire property or just a portion. Your source in the business world, "Kommersant," reports that Magnit could completely withdraw from the large-format retail sector, shuttering its hypermarkets and supermarkets to focus on smaller stores [4].
With origins tracing back to 1994, founded by Sergei Galitskiy, Magnit has been a key player in the retail industry [1]. In 2018, Galitskiy sold 29.1% of his shares to VTB Bank for 138 billion rubles, subsequently leaving the company. Just three years later, VTB Bank transferred Magnit to the investment firm Marathon Group [1].
Magnit ranks second among Russian retailers in terms of revenue, trailing only X5 Group (Perekrostok, Pyatetokha, and Chizhik) [2]. The company leads the market in the number of retail outlets nationwide [2].
By the end of the first quarter of 2025, Lenta boasted 263 hypermarkets, 319 supermarkets, 3106 home-format stores, and 1720 pharmacy stores. In the market for hypermarkets, Lenta reigns supreme [2].
Last year, both Lenta and Magnit made moves to acquire Ashan in Russia for a reported 30 billion rubles [5].
Recently, Magnit has been focusing on strategic acquisitions, such as securing Marketplace Technologies LLC from AliExpress Russia JV [2][3]. Furthermore, Magnit has opted to hold onto its net profit for 2024 instead of paying dividends, possibly reflecting a financial strategy in light of economic unrest in Russia [2]."
In light of Magnit's potential exit from large-format retail, the finance industry is closely watching the ongoing negotiations between Magnit and Lenta, as the latter may seize this opportunity for takeover. Meanwhile, the retail industry is abuzz with speculation about the future of Magnit's business model, with a possible shift towards smaller stores. This move could have significant implications, considering Magnit's historical significance and current position as the second largest retailer in Russia, trailing only X5 Group.
