CDRL goes East
Retail & leisureIn order to do this the company has bought a majority stake (69 pct) in the Lemon Fashion group, while strengthening its cooperation with Belarusian children’s goods chain Buslik and with Polish playroom operator Fikołki. Lemon Fashion owns two brands Lemon Explore (children’s footwear and clothing) and Petit Bijou (elegant accessories for girls).
“The product range of the Lemon brand complements our offer with clothing, sports shoes and girls’ accessories. The company has a strong position on the Belarusian market; it is also growing significantly on the Russian and Kazakh markets. By adding the brand in the group, we will be able to build a complementary product range for Eastern European markets,” claims Marek Dworczak, the CEO of CDRL. This transaction was a condition for the takeover of DPM (formerly the West Ost Union Group Commercial Industrial Group – or WOU), which operates the chain of 46 Buslik stores. Both companies were owned by the same individual – Sergey Misiachenko. CDRL now owns a 75.9 pct stake in DPM.
CDRL’s activities are aimed at developing brands in its portfolio, and thus expanding its group of potential customers. The company plans to strengthen its presence on the Eurasian Customs Union markets, increase its market share there and develop its online sales channel (mainly in Belarus). The companies will all use common purchasing policy and logistics infrastructure (their warehouses will be transferred to CDRL’s buildings), which will optimise the supply chain.
The CDRL Group has also acquired a minority stake in Polish playroom operator Sale Zabaw Fikołki. In March 2018 it acquired a 10 pct stake and increased this to 40 pct in January this year.
“Together with Fikołki we can provide our customers with new services and increase the sales of children’s clothing and footwear through this new channel. Together we can negotiate for more attractive locations, which will also have a positive impact on the results achieved by both companies,” adds Marek Dworczak.
A cooperation contract has been agreed between Fikołki and CDRL until 2021. Two stores and five sales corners (shops within a shop) are currently operated under the Coccodrillo brand in its partnership with Sale Zabaw Fikołki. This number is expected to increase. Fikołki currently has seven locations, which in 2019 should rise to 14, in 2020 to 23 and to as many as 31 by the end of 2021. The idea is for Fikołki and Coccodrillo to take advantage of the synergy between the two formats, e.g. in Poland the product range of the chain will also be available in Fikołki on non-retail Sundays. At the same time, Fikołki will look closely at entering EE markets as a result of its cooperation with CDRL.
“We have not ruled out expansion into Belarus,” suggested Bertrand Jasiński, the CEO of Sale Zabaw Fikołki.
Furthermore, the company will be launching a separate brand featuring e-sport and VR (virtual reality) entertainment.
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